When someone is placed in a position of trust — such as a trustee, business partner, or financial advisor — they are legally required to act in the best interests of those they serve. This obligation is known as a fiduciary duty. When a fiduciary fails to uphold these responsibilities, it can cause serious financial harm and legal complications.

Understanding what constitutes a breach of fiduciary duty in Ohio is essential for anyone involved in business partnerships, estate administration, or financial matters. If you suspect a fiduciary has acted improperly, you may have grounds to pursue legal action.

What Is a Fiduciary Duty?

A fiduciary duty is a legal obligation that requires one party (the fiduciary) to act in the best interests of another party (the beneficiary). Fiduciaries are held to a high standard of care and must prioritize their client’s or partner’s financial well-being above their own interests.

Common examples of fiduciary relationships include:

• Trustees managing trust assets for beneficiaries.
• Executors overseeing estate administration.
• Business partners acting in the company's best interests.
• Financial advisors managing investments or financial decisions.
• Attorneys representing clients.
• Corporate officers and directors protecting shareholders' interests.

In Ohio, when a fiduciary relationship is established, the fiduciary is legally bound to act with honesty, loyalty, and care.

Key Duties of a Fiduciary in Ohio

Under Ohio law, fiduciaries must uphold several critical responsibilities, including:

1. The Duty of Loyalty

A fiduciary must always act in the best interests of the beneficiary, avoiding conflicts of interest and self-dealing. For example, a trustee cannot personally profit from the trust’s assets unless explicitly authorized.

2. The Duty of Care

A fiduciary must exercise reasonable care and diligence when managing finances, making decisions, or handling legal matters. This includes conducting thorough research, seeking expert advice when necessary, and acting prudently.

3. The Duty of Disclosure

Fiduciaries are required to provide complete and accurate information to beneficiaries. Failing to disclose key financial details, risks, or conflicts of interest can result in legal consequences.

4. The Duty to Follow Instructions

A fiduciary must adhere to the terms outlined in legal documents such as wills, trusts, or partnership agreements. Deviating from these instructions without proper authorization may be considered a breach of duty.

What Constitutes a Breach of Fiduciary Duty in Ohio?

A breach of fiduciary duty occurs when the fiduciary fails to uphold their legal obligations, resulting in harm to the beneficiary. Common examples of breaches include:

1. Misappropriation of Funds

If a fiduciary diverts trust funds, estate assets, or business resources for personal use, they have violated their duty of loyalty. This form of misconduct is one of the most serious breaches.

2. Fraud or Deception

Providing false information, forging documents, or intentionally misleading a beneficiary is considered a breach of fiduciary duty. Even withholding key financial details can qualify as fraud.

3. Conflicts of Interest

A fiduciary must avoid situations where their personal interests conflict with their duty to the beneficiary. For instance, a trustee investing trust funds in their own business without disclosure may be liable for misconduct.

4. Negligent Management of Assets

Failing to properly manage finances, investments, or property can result in serious financial harm to the beneficiary. This could include careless spending, failing to diversify investments, or ignoring legal obligations.

5. Self-Dealing

Self-dealing occurs when a fiduciary uses their position for personal gain at the expense of the beneficiary. For example, if a corporate officer awards themselves excessive bonuses without board approval, this could be considered a breach.

6. Failure to Communicate or Disclose Information

Withholding information about financial decisions, estate assets, or legal matters may also constitute a breach. Fiduciaries are required to keep beneficiaries informed and disclose relevant details.

How to Prove a Breach of Fiduciary Duty in Ohio

To successfully prove a breach of fiduciary duty in Ohio, the harmed party must demonstrate the following elements:

1. Establishment of a Fiduciary Relationship

First, you must prove that a fiduciary relationship existed. This typically involves showing that the fiduciary was in a position of trust and owed legal obligations to act in your best interests.

2. Breach of Duty

You must provide evidence that the fiduciary failed to uphold their obligations — such as mismanaging funds, failing to disclose information, or engaging in self-dealing.

3. Resulting Damages

It must be shown that the breach directly caused financial harm, loss of assets, or other damages.

4. Causation

Finally, you must establish a clear connection between the breach of duty and the damages you suffered.

What Damages Can You Recover in a Breach of Fiduciary Duty Case?

In Ohio, victims of fiduciary misconduct may be entitled to various forms of compensation, including:

• Financial restitution to recover lost funds or property.
• Compensatory damages for financial losses caused by the breach.
• Punitive damages if the breach involved fraud, malice, or intentional wrongdoing.
• Attorney’s fees and legal costs in certain cases.

When Should You Contact a Lawyer?

If you suspect a fiduciary has mishandled funds, acted dishonestly, or violated their legal duties, it’s crucial to take action quickly. Ohio law imposes deadlines for filing breach of fiduciary duty claims, and delays could impact your ability to recover damages.

An experienced breach of fiduciary duty attorney can help you:

• Gather evidence to support your claim.
• Evaluate the extent of financial harm you’ve suffered.
• Hold the responsible party accountable for their misconduct.
• Navigate the legal process to maximize your compensation.

Contact the Law Offices of Daniel McGowan Today for Legal Representation

Fiduciaries play a critical role in protecting the financial interests of others, and when they fail to fulfill their duties, the consequences can be devastating. If you believe you’ve been harmed by a breach of fiduciary duty in Ohio, contact us today. At the Law Offices of Daniel McGowan, we are dedicated to protecting your rights and helping you seek justice.