Some people are surprised to discover that, under California law, married couples are obligated to act honestly and fairly towards one another. For example, the Family Code in California specifically provides the following:
“This confidential relationship [of marriage] imposes the duty of the highest good faith and fair dealing on each spouse, and neither shall take unfair advantage of the other.”
As a result, whether or not people in California know it, married couples owe a Spousal Fiduciary Duty to one another. This fiduciary duty applies to each spouse's conduct during the course of their marriage. It also applies if the married couple decides to get a divorce.
Spousal Fiduciary Duty and Community Property
Under California law, either spouse has complete power over the married couple's Community Property subject to the foregoing Spousal Fiduciary Duty of the “highest good faith and fair dealings.” Basically, this means either spouse has the authority to control and sell the couple's Community Property assets. Each spouse's own Separate Property, however, remains controlled by the spouse who has ownership authority over that piece of property.
The Spousal Fiduciary Duty also requires each spouse to make full disclosure to the other spouse of all material information related to the existence and character of assets in which the Community Property estate has an interest.
Breaching the Spousal Fiduciary Duty
According to the Family Code of California, neither spouse “shall take any unfair advantage of the other.” Breaching this duty can carry significant ramifications, particularly if the breach arises during divorce proceedings. Examples of how a spouse can breach this fiduciary duty include:
- Failing to disclose, or intentionally hiding, marital property from the other spouse
- Failing to disclose the correct value of a business or other assets
- Mismanaging marital assets
- Intentionally wasting marital assets
- Using marital money to pay down separate debts
- Transmuting the character of property from community to separate in an attempt to reduce the amount the other spouse receives
- Refusing to allow a spouse access to certain financial records
- Selling marital assets without the other spouse's permission
Remedies Available if a Breach is Discovered
Certain remedies exist when it is determined that one spouse breached their fiduciary duty. For example, if one spouse intentionally defrauded the other by hiding marital assets during the divorce proceedings, the impacted spouse can ask the court to award them 100 percent of those assets.
Have Questions About Spousal Fiduciary Duties? Contact The Geller Firm Today
If you have questions about spousal fiduciary duties as they relate to your divorce case in Walnut Creek, Lafayette, Orinda, Moraga, or Contra Costa County, California, consider contacting The Geller Firm. Our team of experienced and respected Lafayette divorce attorneys stand ready to help. We are located in the San Francisco Bay Area and are proud to provide legal services in San Francisco County, Alameda County, Contra Costa County, Marin County, San Mateo County, and Santa Clara County. Our legal team is available for virtual and in-person consultations. Contact us today to schedule an appointment.
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