Keeping money secrets from a spouse is a common reason that couples divorce in California. Hidden credit card debt, excessive gambling, and mismanagement of community assets and debts can lead to a financial downfall and oftentimes result in a breakdown of the marriage.
In addition to the marital and financial problems this may cause, a spouse who conceals financial transactions or uses community property inappropriately may face serious legal consequences.
In California, a husband and wife are subject to laws that govern those who are in a “fiduciary relationship.” Each spouse must act in good faith and not take any unfair advantage of the other.
The fiduciary duty between a husband and wife requires that each spouse must make full disclosure of all information related to community assets and debts. Additionally, this fiduciary relationship requires that each spouse:
- provide the other spouse access to all financial records
- provides complete information related to any transaction related to community property
- hold any profit, as a trustee for the benefit of the other spouse, received from any transaction related to community property, without the consent of the other spouse
This means that hidden credit card debt or the sale of community property, without the other spouse’s knowledge, could be considered a breach of fiduciary duty. This could result in a penalty that awards 100% of the property or the proceeds from the sale of community property to the injured spouse.
Breach of fiduciary duty between spouses is a complicated legal and financial issue. If you suspect your spouse is keeping money secrets, you should seek advice from a divorce financial specialist and a family law attorney.