Navigating a high-asset divorce can be a complex process. What happens when, amid complying with all the legal requirements, you begin to suspect your spouse is intentionally hiding or mismanaging your shared fortune?
Understanding state laws regarding fiduciary duties and penalties for breaches can offer critical insights into your situation.
What California law says about fiduciary duties between spouses
Upon marriage, fiduciary duties bind you and your spouse. This means that you must treat each other with the highest good faith and fair dealing. State law prohibits either spouse from taking unfair advantage of the other in their financial affairs.
Just like non-marital business partnerships, you and your partner must deliver specific duties regarding your community property, including:
- Providing access at all times to books or records for a community property transaction
- Providing true and full information about factors affecting community property upon request
- Refraining from selling or gifting community property without your spouse’s consent
Failure to follow these duties constitutes a breach of fiduciary duty.
Warning signs of breached fiduciary duties
In a high-net-worth divorce, breaches of fiduciary duties are often subtle but have significant financial consequences. Be wary of these warning signs:
- A spouse refuses to provide copies of bank statements or tax returns.
- A spouse makes unexplained, large money transfers to accounts of friends, relatives or entities you do not recognize.
- A spouse dramatically undervalues a community asset.
- The marital estate has a maximized line of credit without your knowledge or consent.
Breached fiduciary duties are unlawful in California. If you suspect your spouse is neglecting their duty, understanding your legal options is paramount.
Actions to take when a breach of duty occurs
In California, you have the right to sue your spouse if their breach of fiduciary duty harms the community estate’s present undivided interest. This option is available in conjunction with your current divorce. If you prove your case successfully, the courts can potentially award you up to 100% of the undisclosed or transferred asset, depending on the severity of the breach.
Protecting your financial future can be challenging during a divorce, especially if you are facing high stakes. Seeking specialized legal counsel can be an opportunity to learn more about your rights, filing deadlines and other crucial information in securing your wealth.