Yes, you have been in a Fiduciary Relationship. Even if you never used the word, it applies to your daily life more than you know. It is a special relationship where the Fiduciary has special control or power over the other person, as the other person may be especially vulnerable and at the mercy of the Fiduciary. Examples of fiduciary relationships include a Doctor to patient, a Teacher to student, and a Lawyer to client.
In law, a fiduciary duty arises when a person looks after money or property on behalf of another person. You might become a Fiduciary when you are:
a) An Executor for an estate
b) A Court appointed Trustee for a Dependant Adult; or
c) An Attorney under an Enduring Power of Attorney
In these scenarios, the Fiduciary is obligated to look after the assets and all money received or distributed. The obligation includes being able to account for all transactions; in other words, the money in needs to equal the money out. Being close enough is below the standard. If you are a Fiduciary for a family member, it is foolish to hope that other family members will relax this standard, or trust that you did everything right if you cannot balance the books.
In Medicine Hat and other places in Alberta, the courts quite consistently say that a Fiduciary who cannot account for money or assets, will personally reimburse the other party in that relationship for the amount of unaccounted money and pay court fees to the person who raised the issue. If you planned to charge a fee for acting as a Fiduciary, your ability to do so is reduced or eliminated when you cannot balance the accounts. In my opinion, few people who are appointed as a Fiduciary and fewer people who deal with them, appreciate the scope of Fiduciary liability.
So what can you do if you become a legal Fiduciary? 1) I would approach the task with the mindset that you will be called upon to verify what you did in that role, especially by family members. 2) Set things up right from the start by keeping the assets and money separate from your own. A bank account in the name of Les Scholly in trust for John Smith tells the world that I am holding this money for another person. 2) You should pay bills with cheques, not cash. Cancelled cheques and bank statements are a great way to verify money in and money out. 3) Keep a receipt for every purchase. 4) Most importantly, admit when you cannot verify an expense. If you hide the fact that you cannot account for some money, you may put ALL of your actions under the microscope.
If you appreciate the expectations of being a Fiduciary, you have a better likelihood of meeting those expectations. An Estate lawyer in Medicine Hat, I am able to give you sound advice on your particular matter to ensure your role in the fiduciary relationship is successfully completed.