A fiduciary duty is a contractual and legal requirement for one party to act in another party’s best interests. Upholding fiduciary duties is vital for the good-faith functioning of many types of relationships in various legal contexts. Consequently, breaching a fiduciary duty is a serious transgression, and those who violate their obligations may face not only the termination of their legal relationship but also a requirement to pay compensatory damages and the disgorgement of profits.
If an individual has acted in breach of their fiduciary duties toward you, whether in a business relationship or an estate planning capacity, you may be eligible to file a legal claim to recoup your losses. The experienced Florida legal team at Gueronniere, P.A., has extensive experience handling business and estate planning issues for people across all walks of life, including high-net-worth individuals and families. Call us today or contact us online for a free consultation to learn more about how we can help you with your unique situation.
What Is a Fiduciary Duty?
A fiduciary relationship is an obligation that exists between one party (the fiduciary) who has a legal duty to act in the best interests of another party (the principal). Common examples of fiduciary relationships include attorney-client, trustee-beneficiary, business partners, corporate officers and directors, and agents and principals.
The key elements of fiduciary duty include:
- Duty of Care – The fiduciary must act with the same level of care, skill, and diligence that a reasonable person would exercise in similar circumstances.
- Duty of Loyalty – The fiduciary must put the principal’s interests ahead of their own and avoid conflicts of interest.
- Duty of Good Faith – The fiduciary must act honestly and in good faith, without any ulterior motives or hidden agendas.
- Duty of Disclosure – The fiduciary must disclose all material information to the principal, including any potential conflicts of interest.
Breach of Fiduciary Duty in Business Law
In the context of business relationships, fiduciary duties exist between partners, shareholders, directors, and officers of a company. Actions that may constitute a breach of fiduciary duty in business settings include:
- Self-dealing or conflicts of interest – When a fiduciary engages in transactions or activities that benefit themselves rather than the business or its shareholders
- Misappropriation of corporate assets or opportunities – When a fiduciary uses company resources or opportunities for personal gain
- Failure to disclose material information – When a fiduciary fails to disclose important information that could affect the company or its shareholders’ decisions
- Negligent management or decision-making – When a fiduciary fails to exercise reasonable care and diligence in managing the company’s affairs
The potential consequences of breaching fiduciary duty in business can be severe, including financial damages, dissolution of the business, and personal liability for the fiduciary.
Breach of Fiduciary Duty in Estate Planning
In the context of estate planning, fiduciary duties are owed by trustees, executors, and personal representatives to the beneficiaries of a trust or estate. Actions that may constitute a breach of fiduciary duty in estate planning include:
- Mismanagement or misappropriation of trust assets – When a fiduciary mishandles or misuses the assets of a trust for their personal benefit
- Failure to act in the best interests of beneficiaries – When a fiduciary puts their own interests ahead of the beneficiaries’ interests
- Improper distributions or investments – When a fiduciary makes distributions or investments that are not in line with the terms of the trust or the beneficiaries’ best interests
- Failure to properly account for assets or provide required disclosures – When a fiduciary fails to keep accurate records or provide required information to the beneficiaries
The potential consequences of breaching fiduciary duty in estate planning may include a surcharge (being required to reimburse the trust or estate for losses), removal from the fiduciary position, and personal liability.
Legal Remedies
In Florida, if a fiduciary has breached their duties, the aggrieved party may be entitled to various legal remedies, including:
- Compensatory damages – The fiduciary may be required to pay monetary damages to compensate the principal or beneficiaries for any losses suffered as a result of the breach.
- Disgorgement of profits – The fiduciary may be required to disgorge (give up) any profits or benefits they obtained through the breach of duty.
- Injunctive relief – A court may issue an injunction (a court order) to prevent further breaches of fiduciary duty or to compel the fiduciary to take specific actions.
- Removal of the fiduciary – In cases of serious breaches, the court may remove the fiduciary from their position and appoint a new fiduciary to act in the principal’s or beneficiaries’ best interests.
Given the complex legal issues involved in cases of breach of fiduciary duty, it is crucial to seek counsel from experienced attorneys with a background in civil litigation, business law, and estate planning matters. An attorney can help you by evaluating the merits of your case, advising you on the appropriate legal remedies, and representing your interests in court or settlement negotiations.
Victim of a Breach of Fiduciary Duty? Contact Grace de la Gueronniere Today
When it comes to business relationships, estate planning, and other legal arrangements, trust is everything. When you suffer losses because the person you trusted took advantage of that trust, you may have a right to hold the wrongdoer accountable for their actions. Working with a legal representative with a thorough knowledge of civil litigation, business law, and estate planning matters can be your key to securing the compensation and justice you deserve.
At Gueronniere, P.A., we are committed to providing excellent legal services for clients in West Palm Beach and the surrounding areas. Our boutique law firm takes a tailored approach to each case we take on. We will listen compassionately to your story so we can address your individual needs as effectively and efficiently as possible. Contact us today for a confidential consultation to learn more about how we can assist you.