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What is a breach of fiduciary duty?

When we trust others to handle our assets, there is always a risk of something going wrong. However, when someone misuses your funds or property, there are also legal ways to correct the matter. Learning how to best protect yourself is a key way to make sure you are being treated fairly while dealing with fiduciaries. 

A breach of fiduciary duty is defined as a trust or individual mishandling your money or accounts, either by hiding information or making self-serving choices. This may arise when they act in a lax or unscrupulous way, which creates a conflict of interest between their promise to you and their own self-interest. The person or party who does this may also be liable to pay damages in order to recompensate you. 

According to the Legal Dictionary, there are three statements that must be true in order for there to be a breach of fiduciary duty. The first is the party in question had a clear duty or responsibility to you. Then, if you have proven that they have a duty and breached the duty, which is the second statement, you must also prove it has negatively impacted you as a direct result. If all three of these statements are true, then you have a chance to sue for damages. 

Breaches of duty may occur at any time, so it is best to stay aware of how to deal with them. A fiduciary has a duty to make the best possible choices in your stead, and there are laws in place to protect you. Understanding what breaches are and how they occur helps you plan for better investments in the future.