California Family Code 1100

California Family Code 1100 Attorney

When you decide to commit yourself to someone else through marriage, there are many responsibilities you take on. You often make a promise to care for, support, and encourage your partner during your marriage, but there are some duties that also extend beyond the end of a marriage relationship.

One thing that you will be responsible for, even once you file for divorce, is fiduciary duty. You become a fiduciary to your spouse when you get married and share financial responsibilities. This duty comes from California Family Code 721, which sets the general rule that spouses must deal with each other honestly and fairly, and Family Code 1100(e), which applies that rule to how you and your spouse manage and divide your property during a divorce.

An experienced property division attorney from Quinn & Dworakowski, LLP, can help you understand your fiduciary duty and the relevant family code during your divorce.

What Is Fiduciary Duty?

Many of the responsibilities you share during a marriage, such as paying bills and funding hobbies or activities, end when you file for divorce. That is not the case with your fiduciary duty. While your marriage may be ending, you will not be released from a fiduciary duty until all your property and assets have been divided equally.

California also requires both spouses to exchange sworn Preliminary and Final Declarations of Disclosure under Family Code sections 2100 through 2113, so each spouse has to put their assets and debts on the record before the divorce is finalized.

This means that, during your divorce proceedings, you are required to be honest about any community assets you share, treat any financial dealings with your former spouse with integrity, and not do anything to intentionally harm the other party financially. If you breach your fiduciary duty during a divorce, you may face serious consequences.

Fiduciary Duty in a California Divorce

Many of the responsibilities you share during a marriage, such as paying bills and funding hobbies or activities, end when you file for divorce. That is not the case with your fiduciary duty. While your marriage may be ending, you will not be released from a fiduciary duty until all your property and assets have been divided equally.

This means that, during your divorce proceedings, you are required to be honest about any community assets you share, treat any financial dealings with your former spouse with integrity, and not do anything to intentionally harm the other party financially. If you breach your fiduciary duty during a divorce, you may face serious consequences.

Ways to Breach Fiduciary Duty in a Divorce

There are several ways that a fiduciary duty may be breached during a divorce, though it may not always be maliciously intended. Some of the most common ways to breach your fiduciary duty include:

• Not disclosing information about community property. If you have a piece of property or an asset that was obtained during your marriage, it is considered community property. If you do not disclose that property, in an attempt to get a better outcome in the division of assets, you may be in breach of your fiduciary duty.
• Selling community property during the divorce without your spouse’s consent. For your family home or other community real estate, California law requires both spouses to sign off on the sale (Family Code 1102).
  For most other community property, one spouse can usually sell or manage the asset alone, but cannot give it away or sell it for less than fair value without the other spouse’s written consent (Family Code 1100(b)). Hiding a sale or disposing of an asset this way can be a breach of duty and lead to a penalty.
• Poorly managing community property. You may make a deal or business decision regarding a piece of community property that fails and ultimately results in a financial loss. If the loss negatively impacts your former spouse, you could be found in breach of fiduciary duty.

Consequences of Breaching Fiduciary Duty During a Divorce

If a court finds that you breached your fiduciary duty, Family Code 1101 sets out the penalties you may face. These consequences may include:

• The court may award your former spouse 50 percent of the value of the asset you hid, sold, or mismanaged, plus their attorney’s fees and court costs.
• If the court finds that you acted with fraud, malice, or oppression, it may award your former spouse 100 percent of the asset’s value instead of half.
• You may also be ordered to give a full accounting of the asset and let your former spouse inspect the related records.

Other consequences may be handed down, depending on the details of your case. An experienced property division attorney can help you understand your fiduciary duty and how to avoid breaking it.

FAQs

Q: What Is the Fiduciary Duty of a Spouse in California?

A: When you enter into a marriage with another person in California, you have certain responsibilities to your spouse where finances are concerned. This includes how you treat them, how assets and property are divided, and ensuring that everything is handled fairly. These are called fiduciary duties and often include generally treating your spouse with high standards of fairness and honesty.

Q: What Are the Fiduciary Duties of a Divorce?

A: Fiduciary duties are financial obligations an individual has to another party that they are involved with. In a marriage, this is a fiduciary duty between spouses to treat all financial dealings with integrity and fairness. During a divorce, that means that both parties must disclose all community assets and property so that they can be divided equally and fairly.

Q: What Is the Burden of Proof for Breach of Fiduciary Duty in California?

A: If your spouse breaches their fiduciary duty during your divorce proceedings, it can present many challenges to finalizing a divorce agreement. They may have been embezzling money for a business you shared, not honestly disclosed the property and assets they hold, or sold community property without informing you.

To prove this during a divorce, your burden of proof is to show that any losses you suffered were a direct result of your spouse’s breach of fiduciary duty. In many cases, if your spouse got an unfair advantage from a transaction involving your money or property, the burden can shift to them to prove they acted fairly.

Q: What Is a Breach of Fiduciary Duty in California?

A: One of the primary actions taken during a divorce in California is the division of community assets and property. A breach of fiduciary duty is when one spouse does something that has a major negative impact on the other spouse’s half of their shared property. If this is discovered and proved in court, then there may be a penalty, such as the court awarding your former spouse part or all of the value of the asset you hid, sold, or mismanaged.

Q: How Long Do I Have to File a Breach of Fiduciary Duty Claim in California?

A: In most cases, you have three years from when you actually learned about the breach to file a claim under Family Code 1101(d). This three-year limit generally does not apply while your divorce, legal separation, or nullity case is still open.

This pause applies to claims about community property. If your claim is about separate property instead, a different, shorter deadline may apply, so it is worth asking an attorney which one fits your situation.

Quinn & Dworakowski, LLP, Can Help You Understand Fiduciary Duty

The fiduciary duty that you have to a spouse carries far beyond the time that your marriage ends. You will not be entirely free of your duty until all your assets and property have been divided equally.

Understanding what actions you can and cannot take to ensure that your fiduciary duty is not breached can be confusing, as there are many things that could be considered a breach of duty. 

The experienced family law team at Quinn & Dworakowski, LLP, can help you navigate the division of assets safely and within your duty, whether your case is heard at the Lamoreaux Justice Center in Orange or elsewhere in Orange County.

Quinn & Dworakowski, LLP, Can Help You Understand Fiduciary Duty

The fiduciary duty that you have to a spouse carries far beyond the time that your marriage ends. You will not be entirely free of your duty until all your assets and property have been divided equally. Understanding what actions you can and cannot take to ensure that your fiduciary duty is not breached can be confusing, as there are many things that could be considered a breach of duty. The experienced family law team at Quinn & Dworakowski, LLP, can help you navigate the division of assets safely and within your duty. Contact our office today with questions regarding your fiduciary duty.