2015: What is a Breach of Fiduciary Duty in a San Diego Divorce or Legal Separation and Why Does it Matter?
When a husband and wife enter into transactions with their spouse, they are subject to the standard of a fiduciary. This relationship between wife and husband is confidential. In addition, this relationship imposes the highest duty of fair dealing and good faith with regard to each spouse. Neither spouse is allowed to take any advantage which is unfair of the other spouse. On dictionary definition of “fiduciary”, the work comes from the Latin word [fiducia] which means “trust”. This duty imposes the standard of good faith, full disclosure and total trust such as persons who are married. A fiduciary is held to a much higher standard of care than one would be to a stranger. The fiduciary must avoid any self dealing and also any conflicts of interest. Fiduciaries can exist in other areas of San Diego law such as trustee of a trust. In a divorce or legal separation, the issue of the duty between spouses can be very complicated. If a spouse is not allowed to place their own interests first and must consider the interests of their spouse as much as their own, then this can create a conflict of interest when the marriage is not going well. San Diego does not have adultery standards in 2015 and also has no fault divorce however, in the past, San Diego residents were subject to fault divorce and adultery was considered not only a ground for divorce but also a ground for unequal division of the marital property. This theory, today, carries on in the same analogy that property that is held by the community must be managed for the benefit of the community and not the benefit of one spouse which is detrimental to the benefit of the other spouse.WHAT IS A BREACH OF THE FIDUCIARY DUTY STANDARD?
The fiduciary standard can be breached by “self dealing”. This includes placing the interests of the spouse who is breaching ahead of the interests of the other spouse. This breach can include investments and the managing and handling of investments. In many cases, a request for a full and complete accounting of the assets and debts is instituted and the results may require a forensic CPA. There are many other acts which can constitute a breach of fiduciary duty and availing yourself of an experienced San Diego family law attorney can be critical.WHAT ARE SOME POSSIBLE CONSEQUENCES OF A BREACH OF FIDUCIARY DUTY?
If the breach was unintentional, there may be no consequences. If the breach was intentional, then there are mandatory attorney fees and costs as well as a penalty of 100% of the value of the asset. This is akin to the penalty for an omitted asset which can also lead to a 100% penalty as in the Rossi case. In the Rossi case, a wife won the lottery when she was married. She then divorced her husband and did not inform him or list the lottery winnings. The husband found out after the divorce judgment was entered and went back to Court and the Judge awarded him 100% of the lottery winnings. As such, it is crucial not to breach your fiduciary duty. It is hard enough to only be awarded one half of your hard earned assets but to be awarded no interest is much worse.HOW CAN AN EXPERIENCED SAN DIEGO LAW FIRM HELP IN YOUR PENDING FAMILY LAW CASE?
An experienced family law firm, such as Doppelt and Forney, APLC can assist you in your divorce to protect your rights in regards to potential breach of fiduciary duty claims as well as other aspects of family law. A free virtual consultation up to 30 minutes is offered to legally analyze your individual case which is private and confidential whether you hire or not.