Married people, just like business partners, are supposed to treat each other with the utmost of good faith and fair dealing. Just as a business person should not be engaged in self-dealing at the expense of his or her partner, a spouse should likewise not steal from the community or imprudently manage community assets. In the Family Code and in case law, the fiduciary duties are set forth quite clearly. They actually parallel many of the partnership statutes set forth in elsewhere in the California Laws. As a rule of thumb, one could think of fiduciary duties as a “golden rule” about dealing with community assets and those of one’s spouse, and do unto the other party as you would have the other party do unto you. Under the code, dishonesty and self-dealing are dealt with harshly, and if a spouse is found to have breached his or her fiduciary duties to the other party, the breaching party will likely face sanctions, have to pay attorney’s fees, and give back the value of what they took. Cliche aside, honesty is the best policy, and in light of recent cases, such as Marriage of Fossum, dishonesty comes with a hefty price.
In mediated and uncontested divorce cases with our firm, the parties rely on each other’s honesty and full financial disclosures to effectively negotiate their marital settlement agreement. The fiduciary duty to a spouse continues during the pendency of a divorce proceeding until judgment is entered.