Fiduciary relationships are established every day in countless scenarios all across the globe.
One party, referred to as the fiduciary, is appointed to handle typically money or other financial matters for another party, known as a beneficiary. The fiduciary has a duty, or fiduciary obligation, to act only in the best interests of this beneficiary-or face legal consequences.
A recent case involving a high-profile celebrity-Johnny Depp-is a case in point.
The incidence has caught the attention of several media outlets, illustrating the importance of a fiduciary's duty and specific consequences they face in the event they violate their duty of care under the law.
Depp's business managers and their responsibility
From 1999-2016, Depp hired The Management Group, known as TMG, as his business managers. They were tasked with handling a wide range of his affairs, including matters pertaining to his real estate and taxes, among other dealings.
After suspicions surfaced about a property he owned in France, Depp hired an independent investigator to thoroughly examine his financial affairs. The investigation uncovered widespread fraud, negligence and mismanagement by TMG that Depp believes resulted in the loss of tens of millions of dollars.
Among numerous allegations, Depp claims TMG failed to file his taxes on time, costing him millions in IRS penalties, loaned out large sums of money to third parties for TMG business ventures without his consent, and took enormous management fees Depp claims he never permitted.
Depp files suit seeking millions in damages
As a result of what he calls "gross mismanagement," Depp has filed suit against TMG for breach of fiduciary duty and is seeking millions in damages. He is also asking for an injunction to stop the company from taking foreclosure action on any of his properties.
It's true that Depp's scenario is an anomaly; his status as a huge celebrity, his net worth and reported losses from the mishandling of his affairs by his business managers are not exactly the norm and relatable to the average person.
But the media's attraction to this particular matter illustrates the importance of a fiduciary's duty under the law, regardless of the amount they are responsible for handling or the public recognition of the individual affected.
Whether the fiduciary is lawyer, an executor of a trust or estate, or member of a board of directors, they all have one common interest: putting the beneficiary's interest above all others.