Here's a breakdown:
* Legal Duty: This means the fiduciary has a legal obligation to act in the best interest of the other party. This obligation is enforced by law, and a breach can result in legal consequences.
* Ethical Duty: This means the fiduciary is bound by ethical principles to act with honesty, loyalty, and fairness towards the other party.
* Best Interest: The fiduciary must prioritize the needs and interests of the other party above their own. This includes avoiding any conflicts of interest.
Examples of fiduciary relationships:
* Trustee: A trustee manages assets on behalf of beneficiaries.
* Executor: An executor manages the estate of a deceased person.
* Financial Advisor: A financial advisor provides investment advice to clients.
* Corporate Director: A director acts on behalf of the company and its shareholders.
* Agent: An agent acts on behalf of a principal.
* Lawyer: A lawyer represents a client in legal matters.
Key characteristics of a fiduciary:
* Duty of loyalty: Acting in the best interest of the other party.
* Duty of care: Acting with skill and diligence.
* Duty of confidentiality: Keeping information about the other party confidential.
* Duty of disclosure: Disclosing any potential conflicts of interest.
In essence, a fiduciary relationship is one of trust and responsibility. The fiduciary is expected to act with the highest degree of integrity and to prioritize the interests of the other party above their own.