Legal Definitions - account duty

Account duty refers to the legal obligation of an individual or entity to provide a detailed, accurate, and transparent record of all financial transactions, assets, and liabilities they have managed or controlled on behalf of another party. This duty typically arises in relationships where one party holds a position of trust and responsibility over the financial affairs or property of another, ensuring accountability and preventing misuse or mismanagement.

• Example 1: Financial Advisor and Client

  A financial advisor manages an investment portfolio for a client. The advisor has an account duty to regularly provide the client with comprehensive statements. These statements must detail every investment purchase and sale, all dividends or interest earned, any management fees charged, and the current valuation of the entire portfolio. This illustrates account duty because the advisor, acting in a position of trust, must transparently show the client precisely how their money has been handled and what its current status is.

• Example 2: Executor of an Estate

  When a person passes away, an executor is appointed to manage their estate, which involves collecting assets, paying debts, and distributing the remainder to beneficiaries. The executor has an account duty to the estate's beneficiaries. This means they must keep meticulous records of all assets identified and collected, every debt and expense paid (such as funeral costs, legal fees, or taxes), and how the remaining assets are ultimately distributed. This duty ensures that the beneficiaries can verify the proper and fair administration of the deceased's estate.

• Example 3: Property Manager and Owner

  A property owner hires a property management company to oversee their rental properties, including collecting rent, arranging repairs, and paying property-related bills. The property management company has an account duty to the owner. They must provide regular, detailed financial reports that itemize all rent collected from tenants, all expenses incurred for maintenance and utilities, any vacancies, and the net income generated by the properties. This demonstrates account duty as the manager, entrusted with the owner's property, must provide a clear financial picture of their operations.