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Fiduciary duty is the obligation to act in someone else’s best interest. A fiduciary duty arises when someone places their trust and confidence in another person, with the knowledge of that person. Common relationships that beget fiduciary duty include many business and business-adjacent contexts, including corporations, partnerships, real estate, clergy, and trusts and estates. When you are named a trustee, you have a fiduciary duty to the trust’s beneficiaries that you must fulfill.

Duties of a fiduciary

In California, a trustee is given distinct duties under Division 9, Part 4 of the state’s Probate Code. The fiduciary duty arises when you agree to be designated as a trustee. The major responsibilities of a trustee include:

  • Administering the trust in accordance with the trust instrument (i.e., the written document creating the trust)
  • Following written instructions given to the trustee in the case of a revocable trust created by the initiator of the trust
  • Administering the trust solely in the interest of the beneficiaries
  • Handling multiple beneficiaries with impartiality, even when the beneficiaries have different interests
  • Not using the trust’s property for the trustee’s own profit or benefit
  • Not requiring beneficiaries to waive the trustee’s liability
  • Not knowingly becoming a trustee to any additional trusts that may be counter to the first trust’s beneficiaries’ interests
  • Taking reasonable steps to maintain control of and preserve the trust’s property

Breach of fiduciary duties

If someone else has placed their trust and confidence in you, you are legally forbidden from acting in any way that is detrimental to the beneficiary’s best interest. In such a situation, you must exercise honesty and integrity rather than acting in your own best interest at the expense of the other party. If you fail to act in the other party’s best interest, you may have committed a breach of fiduciary duty, which opens the door to legal action against you.

The best way to avoid this is to maintain open and honest communication with the other party, thus avoiding a breach. However, if you have been accused of a breach, it is in your best interest to contact an experienced trusts and estates attorney to evaluate the situation.

Consult an experienced California trusts and estates attorney

Whether you are a trustee, beneficiary, executor, or administrator, The Law Offices of Daniel Leahy in Oakland is prepared to handle your trust and estate legal issues. Call (510) 985-4151 or contact us online to schedule a free consultation.