Bivonas solicitors discuss fiduciary duties and a breach of these obligations

According to Bivonas, the existence of a trust automatically establishes that the named trustee would hold the property for the benefit of the beneficiary. All trustees have fiduciary duties, as by being given this role, they are required to act loyally, fulfil their obligations and suppress their own interests. A fiduciary, Bivonas explains, carries with it very specific duties relating to the property named in the trust, and these include for the trustee not to act in a way which benefits a third person or to their own advantage, not to put themselves in any position, where their own interests are in conflict with other fiduciary duties, and not to profit from their role as trustee.

One of the key fiduciary duties, Bivonas says, is to ‘act in good faith’; this means that the trustee must always promote the interests of the beneficiary, and do everything in their power to ensure compliance with their legal obligations. Furthermore, trustees are expected to be open and honest about their ability to perform their duties, taking into account the wishes of the beneficiary.

A breach of fiduciary duty may occur when the trustee’s performance falls below the legally required standard, or is in conflict with the aforementioned requirements above. If this breach is proven in court, the judge could issue an order which would require any benefits, financial or otherwise, which the trustee gained through the breach, to be returned to the named beneficiary, as it would be unjustifiable to allow the trustee to keep such benefits. This would be the expected outcome, unless the trustee has evidence which shows that they had disclosed the matter to the trust’s beneficiary, before the made the profit; in other words, that they were authorised by the beneficiary to carry out the course of action in question.

It is important to note, according to solicitors from Bivonas (http://www.legal500.com/firms/3618/offices/8448-london), that fiduciary duties only exist in relation to the existence of the trust itself, therefore the trustee’s legal obligations are only enforceable for the duration of the trust. When the trust comes to an end, so too do the fiduciary duties.