What is ‘Fiduciary Duty’ in Divorce?

Tue 27th December, 2022 Family Law

Many may get a sour taste in their mouth if they are told, during the course of their divorce proceedings, that they must remember their “fiduciary duty” to their soon-to-be-ex-spouse. The entire reason that many couples divorce is that one partner or the other feels that their spouse did not fulfill their duties as a spouse during the course of their marriage – so why should they now consider their spouse and their own “fiduciary duty” toward them?

Indeed, the whole messy nature of relationships and divorce can make a divorce…messy. But upholding your fiduciary duty to your spouse in the course of your marriage and the divorce proceedings will help to ensure that the divorce moves along as swiftly and cleanly as possible, the court recognizes your good behavior, and at the end of the day, it is the best way you can help ensure that your ex observes their fiduciary duty to you as well.

What is a ‘Fiduciary Duty’ Toward a Spouse?

You have a fiduciary duty toward your spouse. This means, first, that you have a fiduciary relationship with your spouse. This means, generally, that you are duty-bound to act with the utmost good faith for the other party’s benefit. Those in a fiduciary relationship are required to treat one another with care and reasonable conduct, be open and honest, and act in good faith. Just as a stockbroker has a fiduciary duty to do their best for their client, each spouse during their marriage (and in the midst of divorce) has a duty to act in good faith toward their spouse.

What Constitutes a Breach of Spousal Fiduciary Duty?

Your or your spouse could breach your fiduciary duty to one another in a number of ways. These items are always very fact-driven and specific. What constitutes a breach of fiduciary duty in one situation may not be a breach at all in another, so it is always imperative to receive formal legal advice tailored to your own situation. However, some general examples of how a fiduciary duty could be breached include the following:

  • Selling a marital asset without the other spouse’s knowledge or consent
  • Gifting an asset to another person
  • Hiding or fraudulently transferring an asset
  • Taking out a second mortgage on the marital home without your spouse’s consent

What are the Consequences for a Breach of Fiduciary Duty?

California Family Code 1101 states that a spouse may pursue and succeed on a claim against the other spouse if they can prove that the other spouse impaired their undivided one-half interest in the community estate. The outcome of such a claim could include the court awarding half of any asset that had been undisclosed or transferred in breach of the owed fiduciary duty. In some situations, the court may even award the non-breaching spouse the total value of the asset in question.

Contact the Law Office of Bradley S. Sandler

If you are considering divorce or dealing with a combative spouse in divorce proceedings, speak with a divorce lawyer at the Law Office of Bradley S. Sandler today. Our firm has successfully helped many clients navigate even the most complex legal landscapes, and we are standing by to discuss how we can work for you.

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