Bay Area Estate And Tax Planning Law Firm

What it means to be a fiduciary

On Behalf of | May 9, 2023 | Fiduciaries |

A fiduciary is an individual legally bound to act in the best interests of another party, known as the principal. You probably already know that your California physician cannot disclose confidential information about your medical history without your permission. However, confidentiality is only one of a fiduciary’s obligations. Continue reading to find out more about this unique type of business arrangement.


Business and medical dealings often require a trusted associate’s services to work on a principal’s behalf. Examples of these types of relationships include the following:

  • Attorney/client
  • Doctor/patient
  • Trustee/beneficiary
  • California real estate broker/buyer or seller
  • Accountant/client


There are specific responsibilities inherent in any fiduciary role. Ensure you thoroughly understand these six obligations before entering into a fiduciary relationship.


If you are acting as a fiduciary, research a topic until you understand the issue. Make your decisions after completing your due diligence investigation.


Loyalty means you put your principal’s interests above your own. If there is a conflict, disclose it and excuse yourself if necessary.

Good faith

You are honest in your business dealings when acting on behalf of your client. You do not try to deceive another party.


You agree not to disclose personal or business information you learn while acting as a trusted advisor. This confidentiality duty continues even after your business relationship ends, and you may never use it for personal gain.


A prudent advisor uses skill and doesn’t rush to conclusions. Your decisions are cautious and deliberate.


If a situation arises in which you feel that you cannot meet your duties, you must disclose this. It is up to the principal to decide how to proceed.

There are legal consequences for breaching fiduciary responsibilities. Ensure you understand your role and its obligations before meeting with a prospective principal.