Property division upon divorce and child custody

Breach of Fiduciary Duty

California Breach of Fiduciary Duty Attorneys

As a general rule, all assets and obligations acquired during the course of the marriage, except those inherited or gifted, are community property. As community property, the court will equally divide the assets and obligations unless the parties agree upon a different division.

Family code section 1100 imposes on the spouse a duty to act in accordance with the general rules governing fiduciary relationships in the management and control of community property until such time as the assets and liabilities are divided by the parties or court. The statute extends the duty of good faith beyond the separation of the parties, and even beyond the dissolution of the marriage, as long as the property remains undivided by the parties or court. The standard of care that must be exercised by each spouse continues to be redefined by legislation and case law, in response to the changing roles of husband and wife in the management and control of the property. When a spouse breaches a fiduciary duty imposed by statute, and when the breach results in the impairment of the other spouse’s present undivided half interest in the community property, the injured spouse has a statutory claim against the other spouse under family code section 1101.

Family code section 2102 imposes on the parties an ongoing duty of disclosure about activities that affect the parties’ assets and liabilities, including investment opportunities, business opportunities, business activity, or other income producing opportunity of either spouse. The spouse who fails to disclose information when he or she is in a superior position to obtain information and records from which an asset can be valued, breaches the continuing duty to update and augment information.

When one spouse fails to disclose the existence of an asset, a California court continues to have authority to divide that asset in a future proceeding. A California court even has the authority to order the other spouse to receive the entire asset in the event it is determined that one spouse intentionally hid or failed to disclose the omitted asset.

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