Breach of Fiduciary Duty: A fiduciary is an individual or corporation to whom property or power is entrusted for the benefit of another. Fiduciaries must prudently care for any such assets, and may also have a number of additional duties, depending on the nature of their fiduciary relationship. These duties include, without limitation: a duty of good faith and fair dealing, a duty of loyalty, a duty of impartiality, a duty to delegate, a duty to inform, and a duty to maintain adequate records. To succeed on a breach of fiduciary duty claim, the plaintiff must prove…
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Breach of Trustees’ Fiduciary Duty – Part 3: Duty to Administer Trusts Prudently and Duty to Inform, Report, and Maintain Adequate Records
In Part 2 of this series, we examined trustees’ duties of loyalty and impartiality. This post will examine the duty to administer trusts prudently and Part 4 will discuss the duty to delegate – or not delegate – in more depth. The duty to administer trusts involves the basic values of good faith, while the duty to inform, report, and maintain adequate records involves the reasonableness of a trustee’s actions. While these principals seem straight forward, they are a bit nuanced in practice. Duty to Administer Trusts Prudently The duty to administer trusts prudently mandates trustees carry…
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On Mandating Trustees’ Duty to Inform and Report
Twenty-three years ago, Clark “CB” Bagby, Jr. assumed control of his father’s already successful demolition and grading company and grew it into one of the largest in the Southeast. Only one of his four children showed any promise or passion for the family business, the others content to enjoy its fruits. CB, the sole shareholder of the eponymously named CBDG, Inc., is acutely aware of his need for succession planning and is equally determined to make it as painless for himself as possible. “I want them to know I’ve taken care of them, but I don’t want to be pestered about what I gave them, whether it’s enough, or…
