What Does “Fiduciary Duty” Mean in a California Divorce?
For many people in California, divorce represents their very first encounter with the legal system. As such, they may suddenly be confronted with a wide range of legal terms that they have never heard before. One example is “fiduciary duty,” a phrase that seems quite complex. If this is coming up in your divorce, it is important that you gain a solid understanding of what it means. This will allow you to move forward with a sense of confidence and efficiency. So what exactly is fiduciary duty? Let’s find out:
A Broad Definition of Fiduciary Duty
In a broad sense, fiduciary duty is the relationship between two people who should have each other’s financial best interests at heart. Many professionals owe fiduciary duty to their clients, such as attorneys, financial managers, and so on. Trustees also owe a fiduciary duty to their beneficiaries.
How Does Fiduciary Duty Apply to Spouses?
Spouses also owe each other a fiduciary duty. From the moment the marriage contract is signed, these two individuals are expected to act in a manner that serves each other’s financial best interests. Since they both share a claim to the marital estate, each spouse must do their best to protect and maintain any assets or property within the estate. Many people forget that in the eyes of the law, marriage is essentially a financial relationship – and nothing more. Faith or tradition does not factor into the equation.
How Does Fiduciary Duty Affect Divorce?
Fiduciary duty can become an issue in divorces. Technically speaking, spouses must continue their fiduciary duty to each other even after the date of separation. This means that they must continue to protect and maintain the family estate after the official breakup. Divorces may expose the fact that a spouse has been breaching their fiduciary duty in a number of different ways:
- Concealing Assets: Spouses may conceal assets during the marriage or after the date of separation. Methods include cryptocurrency, precious metals, offshore accounts, and many others.
- Dissipation of Assets: Willful dissipation of assets refers to the intentional wasting of funds. Examples include gambling, frivolous purposes, or physically destroying valuable assets.
- Failing to Reveal the True Value of Assets: Spouses must reveal accurate information about the value of their properties and assets.
- Deferring Income or Bonuses: Often, spouses defer income, raises, bonuses, and other benefits in an attempt to lower divorce obligations. This can be considered a breach of fiduciary duty.
It is important to note that honest mistakes (for the most part) do not constitute a breach of fiduciary duty. If a spouse simply makes a poor business decision and the family’s estate lowers in value as a result, they cannot be held accountable unless it’s clear that the act was intentional or grossly reckless.
Where Can I Find a Qualified Spousal Support Attorney in California?
We know that approaching divorce in California can be a confusing experience. The good news is that you do not need to become a legal expert in order to end your marriage. Reach out to the spousal support lawyers at RM Law Group, LLP, and we will handle the complicated legal steps for you. We can also clarify any points of confusion, so get in touch today to book a consultation. During this initial meeting, you can ask important questions and receive targeted legal advice.
Jason Martinez is a co-founding partner of RM Law Group, LLP. His practice focuses exclusively on California Family Law and community property division, including litigation and settlement of complex and high-conflict divorce and child custody proceedings. Jason understands that divorce and family law issues have long-term effects on all family members, especially the children.