Under California law, married partners become bound by fiduciary duties that are similar to those within a business partnership. Through their lawful partnership, spouses are required to act with the “highest good faith and dealing” in financial transactions with each other. A breach of the marital fiduciary duty can be used against a spouse during a San Diego divorce case.
What Is Fiduciary Duty?
“Fiduciary duty” is a legal obligation bestowed on a person, known as a fiduciary, to handle someone else’s assets or finances in a way that protects their best interests rather than serving their own interests. It is a legal requirement to manage another person’s money or property (or shared assets) with the utmost care and in an honest attempt to benefit the owner rather than deceive, defraud or take advantage of them.
What Are Marital Fiduciary Duties?
Fiduciary duties are created by certain contracts and legal relationships. Under California Family Code §721(b), this includes marriage. This law states:
“In transactions between themselves, spouses are subject to the general rules governing fiduciary relationships that control the actions of persons occupying confidential relations with each other. This confidential relationship imposes a duty of the highest good faith and fair dealing on each spouse, and neither shall take any unfair advantage of the other.”
As soon as the marriage commences, the marital fiduciary duty begins. It only ends when the marriage is officially dissolved by a court and all property has been divided and distributed; it does not end at the time of separation.
What Is the Penalty for a Breach of Fiduciary Duty Within a Marriage?
If one spouse is guilty of taking advantage of the other and breaching the marital fiduciary duty, the consequences can include the victim receiving a disproportionate amount of marital or community property in a divorce to make up for lost, stolen or misappropriated assets. The victim may also be eligible to have their attorney’s fees covered by the offending spouse.
In a divorce case in California, the state’s community property division law typically divides all shared or marital property evenly between each spouse (a 50/50 split). If there has been a breach of fiduciary duty, however, the spouse harmed by the breach could be eligible for more than 50 percent of marital property to make up for losses suffered.
What if One Spouse Is Hiding Assets?
If one spouse attempts to hide assets to protect them from being divided during a divorce case in San Diego, the courts can order the offender to surrender up to 100 percent of the hidden asset to the other spouse, plus attorney’s fees. A judge has the authority to deviate from the 50/50 split rule to make the harmed spouse whole again due to a breach of fiduciary duty.
Legal Remedies for a Breach of Marital Fiduciary Duty
If you believe you are a victim of a breach of fiduciary duty by your soon-to-be-ex spouse, this is critical information that should be passed along to a divorce lawyer during your dissolution of marriage case. You have grounds for a claim against your ex for any breach of fiduciary duty that results in financial harm to you.
With help from a lawyer, you can prove that a breach occurred, demonstrate your subsequent financial losses, and seek fair compensation or property division based on the breach. Your lawyer will fight for every dollar or asset you are owed. Contact us at Boyd Law to learn more about the role of fiduciary duty in your divorce case in San Diego.
