Fiduciary

Any individual or entity required to act for the benefit of another person in all matters within the scope of a relationship, especially obeying the duties of loyalty, care, and good faith. In estate planning, an individual or entity designated to manage money or property for beneficiaries is required to act in the beneficiaries’ best interest. For example, an executor has a fiduciary duty to a deceased individual’s beneficiaries, so an executor’s self-dealing or mismanagement of the estate constitutes a breach of fiduciary duty owed to the beneficiaries. Often, the written document governing the relationship between the beneficiaries and the fiduciary sets forth a standard of care by which the fiduciary must act. In addition to written fiduciary duties and standards of conduct, each state sets default standards governing fiduciary duties.