Under Texas law, a fiduciary has a legal duty to act faithfully towards a principal. Executors and administrators have a fiduciary duty to the beneficiaries of an estate. A trustee has a fiduciary duty to the beneficiaries of a trust. An agent under a power of attorney owes a fiduciary duty to the grantor of the power. Partners in a partnership arrangement often owe each other fiduciary duties. Lawyers and stockbrokers also typically owe fiduciary duties to clients.
Those are examples of formal fiduciary duties. Texas law also recognizes informal fiduciary relationships, based on family, moral, social relationships. This is often referred to as a confidential relationship. However, not every relationship involving a high degree of trust and confidence rises to the stature of a fiduciary relationship.
The existence of a fiduciary relationship is extremely powerful under the law. It is often called the highest duty under the law. A fiduciary relationship is one of complete trust and disclosure, a fiduciary having a duty to protect all confidences and make full disclosure of all material information to the other party. Self-dealing is strictly prohibited.
At times, the existence of a fiduciary duty can even flip the burden of proof, so the fiduciary has to prove he or she put the interests of the principals above their own personal interests. The remedies for breaches of fiduciary duty are also broad. Not only are traditional damages available, but also punitive damages under certain circumstances. A court may also impose a constructive trust as a remedy for breach of fiduciary duty. A fiduciary also typically has the duty to account for their actions and money spent.
Whether you wish to bring a claim against a fiduciary or you are a fiduciary facing a potential claim, it is important to consult an attorney who is experienced in evaluating and handling fiduciary claims. I have handled fiduciary duty claims in the context of estates, trusts, deeds, life insurance designations, partnerships, and financial accounts.