Breaking Down "FIDUCIARY"
A fiduciary's responsibilities are both ethical and legal. When a party knowingly accepts a fiduciary duty on behalf of another party, they are required to act in the best interest of the party whose assets they are managing. The fiduciary is expected to manage the assets for the benefit of the other person rather than for his or her own profit, and cannot benefit personally from their management of assets. This is what is known as a prudent person standard of care, a standard that originally stems from an 1830 court ruling. This formulation of the prudent-person rule, required that a person acting as fiduciary was required to act first and foremost with the needs of beneficiaries in mind, and that they must work to preserve the estate or corpus of a trust, as well as the amount and regularity of income.(2)
The most common is a trustee of a trust, but fiduciaries can include business advisers, attorneys, guardians, administrators of estates, real estate agents, bankers, stock brokers, title companies, or anyone who undertakes to assist someone who places complete confidence and trust in that person or company. Characteristically, the fiduciary has greater knowledge and expertise about the matters being handled. A fiduciary is held to a standard of conduct and trust above that of a stranger or of a casual business person. He/she/it must avoid "self-dealing" or "conflicts of interests" in which the potential benefit to the fiduciary is in conflict with what is best for the person who trusts him/her/it.(3)
A fiduciary is an important resource that is often overlooked and unused in the area of life planning. A fiduciary is a licensed professional who solely acts in good faith on behalf of the client he or she represents. A fiduciary draws on his or her knowledge and experience locating and seeking available programs, public benefits and other resources that will supplement personal resources or help improve the life of the client. He or she acts as an advocate responsible for protecting the quality of life for individuals who may have no voice and/or can no longer take care of themselves. He or she also serves as a liaison between the individual, family, health care provider(s), caregiver(s) and attorney(s) while providing peace of mind by protecting both physical and financial interest.
(1) Oxford Dictionary of Law
(3) Legal Dictionary - by Farlex