When a client appoints his or her attorney as a fiduciary, the lawyer has the authority to manage the client’s assets and financial affairs. California law governs the actions of fiduciaries to protect clients and prevent disputes.
Before taking on this role, review common responsibilities and rights of a fiduciary.
Roles of a fiduciary
A client or his or her family may hire a fiduciary for various purposes. Typically, a fiduciary works for an individual who can no longer manage his or her own affairs when they become physically or mentally incapacitated, whether because of age or disability. He or she may serve as a power of attorney, conservator, executor, health care representative, guardian, trustee or in a combination of these roles.
Duty of care
The fiduciary must act in good faith to fulfill his or her duty of care. That means he or she is making the optimal choices on behalf of the client. If the fiduciary does not have the knowledge to provide the advice a client needs, he or she must hire an expert to provide added insight.
The fiduciary violates the duty of care if he or she uses the client’s assets to his or her own benefit, which constitutes a conflict of interest. Hiring advisors and contractors on behalf of the client who act illegally or incompetently also violates the duty of care.
If the fiduciary does not fulfill the duty of care, the client or his or her family can sue for breach of contract. In California, the court can award both actual and punitive damages for breach of fiduciary duty.