FYI: A fiduciary relationship is crucial in situations where the primary taxpayer is unable to handle his or her own financial or tax matters. The fiduciary duty is also important in cases where a government authority must grant permission for assets to be distributed, such as in bankruptcy proceedings or execution of a decedent’s estate. Taxpayers use IRS Form 56 to notify the IRS of situations where fiduciary responsibility is granted to another person or entity.