As a business owner, you have to put your trust in a lot of people for your company to run smoothly and successfully. You build relationships with your employees and expect them to do their jobs well and act in good faith. You might not be prepared for your fiduciary to violate your trust.
A fiduciary is a person or group of people who are responsible for controlling and taking care of assets on behalf of someone else. This is the highest level of trust both personally and legally. The fiduciary must act in the best interest of the beneficiary. For example, a business owner could appoint a fiduciary to manage investments. No matter the reason for a fiduciary, the relationship is built on trust and loyalty.
Other examples of a fiduciary duty include an attorney/client relationship for a case or trustee/beneficiary connection for estate planning. Each situation is unique as are the reasons for a possible breach of trust.
Unfortunately, there is always risk of a breach of fiduciary duty. Whether it was an accident or intentional, you as the beneficiary could suffer the consequences. This could be caused by negligence, misappropriating funds or improper use of a higher position for personal gain.
In the case of breach of fiduciary regarding your investments, this could mean you have lost hundreds or thousands of dollars. Your fiduciary could invest in a firm related to a Ponzi scheme or make other choices that could ultimately hurt you financially.
If you suffered actual damages, you may be able to get compensation for what was lost. Additionally, if you believe and can prove that the breach was intentional or a result of fraud or malice, you could be awarded punitive damages.
It can be difficult to identify whether a situation is truly a breach with malicious intentions or an honest mistake. You may believe you are putting trust in the right person or group of people. However, if that trust is violated, you could suffer the consequences of someone else’s actions along with taking the time and expense for legal action for compensation. Being aware of the risks and cautious with whom you designate as a fiduciary could prevent distress in the future.