Fiduciary duty is the legal obligation to act in the best interests of another party with loyalty, care, and good faith. Executors, trustees, and certain advisors owe fiduciary duties, requiring prudence, impartiality among beneficiaries, and avoidance of self-dealing. Breaches can result in removal, surcharge, or other remedies.

Advisors educate new fiduciaries on loyalty, prudence, diversification, and impartiality. They recommend written investment policies and conflict-of-interest disclosures. Following a disciplined process protects beneficiaries and reduces fiduciary liability exposure.