Breach of Fiduciary Duty vs. Breach of Trust

Attribute	Breach of Fiduciary Duty	Breach of Trust
Definition	Occurs when a fiduciary fails to act in the best interest of their client or breaches their duty of loyalty	Occurs when a trustee fails to fulfill their obligations or breaches the terms of a trust
Relationship	Exists between a fiduciary and their client	Exists between a trustee and the beneficiaries of a trust
Legal Action	Can result in civil liability and damages	Can result in civil liability and damages
Examples	Financial advisor making investments without client consent	Trustee using trust funds for personal gain

Definition

Breach of fiduciary duty and breach of trust are legal concepts that involve a breach of a relationship of trust and confidence. A fiduciary duty is a legal obligation to act in the best interest of another party, while a trust is a legal relationship in which one party holds property for the benefit of another. Both breaches involve a violation of trust, but they have distinct characteristics.

Responsibilities

One key difference between breach of fiduciary duty and breach of trust is the nature of the responsibilities involved. In a breach of fiduciary duty, the party in breach has a duty to act in the best interest of another party, such as a client or beneficiary. This duty includes obligations such as loyalty, good faith, and disclosure of relevant information. On the other hand, breach of trust involves a violation of the duties associated with managing and administering property held in trust for the benefit of another party.

Legal Remedies

When a breach of fiduciary duty occurs, the injured party may seek legal remedies such as damages, injunctions, or rescission of a contract. The party in breach may also be required to account for any profits made as a result of the breach. In contrast, breach of trust may result in similar legal remedies, but the specific remedies available will depend on the terms of the trust agreement and the applicable laws governing trusts.

Types of Relationships

Breach of fiduciary duty can occur in a variety of relationships, such as those between a lawyer and client, a trustee and beneficiary, or a corporate officer and shareholders. In each of these relationships, the fiduciary owes a duty of loyalty and care to the other party. Breach of trust, on the other hand, typically involves relationships in which one party holds property for the benefit of another, such as a trustee managing assets for a beneficiary or an executor administering an estate.

Proof of Breach

Proving a breach of fiduciary duty typically requires showing that the fiduciary failed to act in the best interest of the other party, breached their duty of loyalty or care, or engaged in self-dealing or conflicts of interest. In contrast, proving a breach of trust may involve demonstrating that the trustee failed to follow the terms of the trust agreement, mismanaged trust assets, or otherwise violated their duties as a trustee.

Statute of Limitations

Another important difference between breach of fiduciary duty and breach of trust is the statute of limitations for bringing a legal claim. The statute of limitations for breach of fiduciary duty varies by jurisdiction and the specific circumstances of the case. In contrast, breach of trust claims are subject to specific statutory limitations periods that may vary depending on the type of trust and the governing law.

Conclusion

In conclusion, breach of fiduciary duty and breach of trust are both serious legal violations that involve a breach of trust and confidence. While they share some similarities, such as the duty to act in the best interest of another party, they also have distinct characteristics in terms of the responsibilities involved, legal remedies available, types of relationships affected, proof required, and statute of limitations for bringing a claim. Understanding the differences between breach of fiduciary duty and breach of trust is essential for parties involved in these types of relationships and for legal professionals handling related disputes.