A fiduciary is an individual or entity that has been entrusted with the duty to act in the best interest of another party. This relationship is characterized by trust, confidence, and reliance on the fiduciary to act ethically and responsibly. Fiduciaries are legally obligated to put the interests of the other party ahead of their own and to avoid conflicts of interest.

Here are some key characteristics of a fiduciary:

  1. Duty of Loyalty: Fiduciaries must prioritize the interests of the party they serve above their own interests. This duty of loyalty requires them to act in good faith and avoid conflicts of interest.
  2. Duty of Care: Fiduciaries are required to exercise reasonable care, skill, and diligence in carrying out their responsibilities. They must make informed decisions and take actions that are in the best interest of the party they serve.
  3. Prudent Management: Fiduciaries are expected to manage assets or affairs entrusted to them with prudence and care. This includes making sound investment decisions, managing risks, and preserving the value of assets.
  4. Confidentiality: Fiduciaries must maintain confidentiality and protect the privacy of the party they serve. They are typically prohibited from disclosing confidential information without authorization.
  5. Full Disclosure: Fiduciaries have a duty to provide complete and accurate information to the party they serve, particularly regarding matters that may affect their interests. This includes disclosing any conflicts of interest or potential conflicts of interest.

Examples of fiduciaries include:

  • Trustees: Responsible for managing assets held in trust for the benefit of beneficiaries.
  • Executors: Responsible for administering the estate of a deceased person, including distributing assets to heirs.
  • Agents under a Power of Attorney: Authorized to make financial or healthcare decisions on behalf of another person.
  • Corporate Officers and Directors: Fiduciaries to the shareholders of a corporation, responsible for managing the company’s affairs in their best interest.
  • Investment Advisors: Fiduciaries who provide investment advice and manage assets on behalf of clients.
  • Attorneys: Fiduciaries to their clients, obligated to act in their clients’ best interests and maintain confidentiality.

Overall, fiduciaries play a crucial role in various legal and financial contexts, and they are held to high standards of integrity, honesty, and accountability. At ATC, we are proud to serve as fiduciary for our clients.