Historically, marriage was considered to be a sacred union from which specific duties arose. The veneration associated with marriage endured for centuries and well into the nascent years of the United States. Today, family law still recognizes that legal duties arise from the marital relationship—vestiges of an ancient tradition that has withstood the passage of time.
Marriage is a Fiduciary Relationship
In California law, marriage is a fiduciary relationship that imposes fiduciary duties that spouses owe each other. A fiduciary is a person who is obligated to put another person’s interests above their own because they are entrusted with property or legal authority to command their affairs.
Section 721 of the Family Code provides that “[the marital relationship] is a fiduciary relationship subject to the same rights and duties of nonmarital business partners…including but not limited to, the following:
- Providing each spouse access at all times to any books kept regarding a transaction for the purposes of inspection and copying.
- Rendering upon request, true and full information of all things affecting any transaction that concerns the community property. Nothing in this section is intended to impose a duty for either spouse to keep detailed books and records of community property transactions.
- Accounting to the spouse, and holding as a trustee, any benefit or profit derived from any transaction by one spouse without the consent of the other spouse that concerns the community property.”
These interspousal duties are primarily concerned with the management and control of community property. The care that spouses owe each other regarding the management of community property reflects that of a business partnership.
The Duty of Good Faith and Fair Dealing
The fiduciary nature of the marital relationship and the duties that sprung from it is evident in California Family Code § 721(b), which states, “spouses are subject to the general rules governing fiduciary relationships that control the actions of persons occupying confidential relations with each other. This confidential relationship imposes a duty of the highest good faith and fair dealing on each spouse, and neither shall take any unfair advantage of the other.”
Simply put, spouses owe each other the highest duty of loyalty by virtue of the confidential nature of the marital relationship.
Corporations Code § 16404 states that: “A partner’s duty of loyalty to the partnership and the other partners includes all of the following:
- To account to the partnership and hold as trustee for it any property, profit, or benefit derived by the partner in the conduct and winding up of the partnership business or derived from a use by the partner of partnership property or information, including the appropriation of a partnership opportunity.
- To refrain from dealing with the partnership in the conduct or winding up of the partnership business as or on behalf of a party having an interest adverse to the partnership.
- To refrain from competing with the partnership in the conduct of the partnership business before the dissolution of the partnership.”
The Duty of Care
The duty of care that married spouses owe each other is expressed in California Family Code § 721(b) by incorporating the provisions of California Corporations Code § 16404(c), which states that “[a] partner’s duty of care to the partnership and the other partners in the conduct and winding up of the partnership business is limited to refraining from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of the law.”
The Duty of Disclosure
The California Family Code recognizes the importance of openness and candidness when it comes to marriage. This duty also applies when the couple has separated and filed for divorce. During this time, the parties are still legally married and therefore remain subject to their fiduciary marital duties.
The duty of disclosure upon divorce requires the parties in a divorce or legal separation proceeding to provide the following:
- A complete schedule of assets and liabilities
- A declaration of income and expenses
- Submission of all tax returns filed during the past two years before the divorce
Consult Moshtael Family Law for Legal Advice
If you are considering getting a divorce, you should get in touch with an experienced attorney at Moshtael Family Law. We have years of experience dealing with matters involving California family law, including divorce matters and other issues concerning a spouse’s fiduciary duties.For an initial consultation, call Moshtael Family Law at (714) 909-2561 or visit us online today.