Breach of Fiduciary Duty

Under California law, spouses owe each other a fiduciary duty, which is the highest legal duty of care, loyalty and good faith. This duty requires each spouse to act in the best interests of the other spouse in matters relating to community property, such as finances, assets and debts.

If one spouse violates this duty by hiding assets, spending community property for their own benefit, or engaging in other financial misconduct, the other spouse may have grounds to file a legal action for breach of fiduciary duty.

In California, a breach of fiduciary duty claim can be used to recover financial losses suffered by the spouse who was harmed by the breach. This may include an award of damages, such as reimbursement for money spent improperly, lost earnings or other losses resulting from the breach.

If a court finds that one spouse breached his/her fiduciary duty to the other, the court may also impose penalties or sanctions, such as awarding attorney’s fees or reducing the breaching spouse’s share of community property. If the court finds a spouse’s breach was intentional, the court may award 100% of the asset to the other spouse. Case law in California over the past few decades has established how important this issue is in California family law matters.