Fiduciary Abuse


DEFINITION of 'Fiduciary Abuse'

Describes a situation in which an individual who is legally appointed to manage another party's assets uses his or her power to benefit financially in an unethical or illegal fashion.

BREAKING DOWN 'Fiduciary Abuse'

Fiduciary abuse can be practiced by agents such as a financial advisor, or power of attorneys. Examples include a financial advisor borrowing funds from client's account in order to take speculative positions in securities, or even a close family member (acting as power of attorney) misrepresenting a legally incapacitated family member as a way to steal assets.

People can protect themselves from fiduciary abuse by taking an active role in their money management or by setting up an irrevocable trust.

  1. Fiduciary

    A fiduciary is a person who acts on behalf of another person, ...
  2. Fiduciary Fraud

    Illegal practices committed by financial institutions and financial ...
  3. Go Shop Period

    A provision that allows a public company that is being sold to ...
  4. Career-Ending Move

    A huge mistake or bad decision made by an employee that has big ...
  5. Beneficiary

    Anybody who gains an advantage and/or profits from something. ...
  6. Irrevocable Trust

    A trust that can't be modified or terminated without the permission ...
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