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What Is A Fiduciary?

What is a Fiduciary?

Post Series: Executorship in BC

In the context of estate law and planning, there are many roles people may find themselves in which make them a fiduciary. But what does that really mean? In this article, we’ll touch on the basics of fiduciary duties, and their roles and liability in the context of estate planning and administration.

The Basics of Fiduciary Duties

Fiduciary duties arise when someone takes on a task or position which gives them a special relationship of responsibility and loyalty. This most often happens in estate planning when someone receives an appointment as an executor of an estate or a trustee of a trust. Presumed resulting trusts also consider De Jure trustees as fiduciaries. Legislation, case law, and sometimes an organization’s articles of incorporation set out many rules that govern a fiduciary’s actions.

Generally, fiduciary duties relate to loyalty to a beneficiary or group like a company. Standard fiduciary duties can include:

  • Duty to act within the powers conferred to them (through articles of association or testamentary documents, for example)
  • To act in the best interests of the beneficiary or company
  • Not to make an unauthorized profit through their position as trustee
  • Duty of confidentiality

There are many rules which govern the way a fiduciary must act and these are just some basic examples. To determine if a loss suffered by the beneficiary was a result of a fiduciary’s breach of duty, the courts will examine the nature of the act or omission, and will also consider previous court decisions on fiduciary duties.

Liability of a Fiduciary

Fiduciaries are liable for their personal acts or omissions which cause damage and were in breach of their duties. It is important for a fiduciary to understand that a failure to act can constitute a breach of their duty, so sometimes doing “nothing” can result in liability. However, a fiduciary need not worry about liability for any loss an estate or trust suffers unless the courts can clearly link the breach to the loss for claim acceptance. The fiduciary, if proven to have caused the loss through a breach, must return funds to the trust to rectify the situation.

Estate executors have a duty to beneficiaries to administer the estate within a reasonable amount of time.

Even if the breach doesn’t necessarily cause a loss to the trust, such as when the fiduciary makes an unauthorized profit from their position, the courts can still hold them liable.

Usually, the beneficiaries account for the unauthorized personal profit of a fiduciary, and the courts impose a constructive trust over the assets as a remedy. This essentially means that the fiduciary must inform the beneficiaries about all the profit details, and the law grants them a proprietary interest in the profit.

Under a constructive trust, it is as if the fiduciary has been holding the profit for the benefit of the beneficiaries like the other assets in the trust. This breach is grounds for removal of a trustee (fiduciary), for more on this, read our article on removing a trustee from their position.

Fiduciaries in the Context of Estate Planning

Trustees of the estate and the estate’s executor commonly hold the most fiduciary roles in estate planning and administration. Trustees managing estate assets play an important role from the planning of the estate to well after the will writer’s death. Their fiduciary duty is not always to the will writer, but to the beneficiaries of the trust that they manage. Trustees in estate law are often appointed in a will to hold funds or some other asset for a beneficiary until they reach a certain age or milestone in life, and the trustee must exercise due care in maintaining the asset until that time comes.

Executors as Fiduciaries

Executors of an estate also play an important fiduciary role in the administration of an estate. They are appointed in the will to see through the administration of the estate after the will writer’s death. Executors have numerous responsibilities and are ultimately responsible for paying out any debts the estate may have, and distributing the balance of the estate to its beneficiaries according to the will. They will handle almost all of the money in an estate, and must carefully adhere to their duties. At the end of the administration they have to account for all of the money that went in and out of the estate in a passing of accounts. They are fiduciaries to the beneficiaries of the estate, and can also be held liable for a loss to the estate if it is caused by a breach of their duties.

If you’re a beneficiary concerned that your fiduciary (executor or trustee) has breached their duties resulting in a loss, don’t hesitate to contact an experienced estate lawyer. Fiduciaries who breach their duties are liable for replacing any lost value to the estate that resulted from their breach, and we’ll make sure you’re recompensed fairly.

Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at

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