What You Need to Know About Fiduciary Duties in Divorce

Fiduciary duties play a critical role in family law, particularly during divorce proceedings and in the management of family assets. In California, fiduciary duties are imposed on spouses in a marriage, establishing a legal obligation to act in the best interests of one another concerning the management and division of community property. Understanding these duties, their implications in family law cases, and how they interact with other state and federal laws is essential for individuals navigating divorce.

What Are Fiduciary Duties?

Fiduciary duties in the context of family law refer to the legal and ethical obligations that spouses owe to one another during the marriage and during divorce proceedings. In California, these duties arise primarily from the concept of community property and the presumption that both spouses have an equal interest in any property acquired during the marriage.

The Core Aspects of Fiduciary Duties

1. Disclosure of Assets: Both spouses must fully and transparently disclose all assets, debts, and income. This includes providing a complete picture of the financial situation to ensure fair division of property.

2. Management of Community Property: Each spouse has a duty to manage the community property prudently and in good faith. This includes making decisions that are in the best interest of both parties rather than one spouse acting with self-interest or negligence.

3. Protection of Interests: Spouses must protect their partner’s financial interests and refrain from decisions that could harm or disadvantage the other spouse, especially during separation or divorce. This includes refraining from depleting joint assets or incurring unnecessary debts.

4. Accountability: Either spouse can hold the other accountable for breaches of fiduciary duty in family law proceedings. If one spouse fails to fulfill their fiduciary obligations, it could impact the court’s decisions regarding asset division or even result in severe financial consequences including the potential loss of the entire asset to the injured spouse.

Enforcement of Fiduciary Duties

Fiduciary duties are legally enforceable obligations. If one spouse believes the other has breached their fiduciary duties—through improper management of assets or failure to disclose information—it can lead to the affected spouse requesting the court impose sanctions or adjust property division based on the breach including the court awarding a greater share of community property to the wronged spouse based on the other spouse’s failure to act in good faith. The court must, if it finds that a spouse has breached a fiduciary duty, award attorney’s fees incurred.

In California, fiduciary duties in family law are fundamental to ensuring fairness and transparency in marriage and divorce. They obligate spouses to act in one another’s best interests, particularly concerning the disclosure and management of community property.

Navigating these complexities requires experienced legal counsel to ensure compliance and to protect one’s rights during divorce proceedings. By understanding the nature of these fiduciary duties and how they interact with broader legal frameworks, individuals can better position themselves for a fair resolution during what can often be an emotionally taxing experience. Contact my office today to gain clarity and answers for your and your spouse’s fiduciary duties in and avoid potential expensive mistakes during your divorce.