Legal Definitions - dilatory fiduciary

A dilatory fiduciary refers to an individual or entity that holds a position of trust (a fiduciary) but unreasonably delays or procrastinates in fulfilling their duties and responsibilities, often to the detriment of the person or entity they are obligated to serve.

To understand this term, it's helpful to break it down:

• A fiduciary is someone who has a legal or ethical relationship of trust with another party. They are obligated to act in the best interests of that other party, putting the beneficiary's needs above their own. Examples include trustees, executors, financial advisors, and corporate directors.
• Dilatory means characterized by delay, procrastination, or slowness.

Therefore, a dilatory fiduciary is a trustee, executor, agent, or other person in a position of trust who fails to act promptly or reasonably quickly in carrying out their duties, leading to potential harm, loss, or inconvenience for the beneficiary.

Here are some examples illustrating a dilatory fiduciary:

• Example 1: Estate Executor

  Imagine an individual appointed as the executor of a deceased parent's will. The will clearly outlines the distribution of assets to the children. However, for over two years, the executor fails to file necessary probate documents, pay outstanding debts, or distribute the inheritance to the beneficiaries, despite repeated inquiries. The children are unable to access their rightful inheritance, causing them financial strain and uncertainty.

  Explanation: The executor is a fiduciary, obligated to manage and distribute the estate promptly. Their prolonged and unjustified delay in fulfilling these duties makes them a dilatory fiduciary, potentially breaching their duty to the beneficiaries.

• Example 2: Investment Advisor

  A client hires a financial advisor to manage their retirement portfolio, granting them discretionary trading authority. Over several months, the market experiences significant shifts that warrant adjustments to the portfolio's asset allocation. Despite these changes and the advisor's knowledge of the client's risk tolerance and goals, the advisor repeatedly postpones making crucial rebalancing trades or investment decisions, leading to missed growth opportunities and a decline in the portfolio's value compared to market benchmarks.

  Explanation: The financial advisor is a fiduciary, entrusted with managing the client's investments in their best interest. The advisor's consistent procrastination and failure to act in a timely manner to protect and grow the client's assets demonstrate dilatory behavior, potentially constituting a breach of their fiduciary duty.

• Example 3: Trustee of a Special Needs Trust

  A trustee manages a special needs trust established for a disabled adult. The trust's purpose is to provide for the beneficiary's ongoing medical care, therapy, and quality of life expenses. The beneficiary's doctor recommends a new, essential piece of medical equipment, and the family submits the necessary paperwork for approval and payment from the trust. However, the trustee delays reviewing the request and authorizing payment for several months without a valid reason, causing the beneficiary to suffer a decline in health and quality of life due to the lack of timely access to the equipment.

  Explanation: The trustee is a fiduciary, responsible for acting in the best interests of the beneficiary. Their unreasonable delay in approving and disbursing funds for critical medical needs makes them a dilatory fiduciary, failing to uphold their duty to support the beneficiary's well-being.