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Fiduciary Duties in California Family Law Cases

When one spouse to a marital dissolution case is the managing spouse responsible for the parties' resources (bank accounts, rental icome etc.), that spouse owes a fiduciary duty to the other spouse to account for these funds. Earlier this year in the MARGUILIS case, the parties were married for a period of 33 years followed by a 12 year separation prior to filing for divorce. Husband managed the parties' investment accounts and collected the rental income for the parties' 4 rental properties. Just before trial, husband disclosed for the first time that the parties' once prosperous investment accounts were now empty. Without any supporting documentation, he attributed the losses to the decline in the stock market. The court found that a statement of these accounts held by the wife from twelve years ago was sufficent to show the existence and value of these accounts. Husband's failure to provide evidence to the contrary resulted in the court imputing the value of the accounts as of the date of the statement that wife produced that was from twelve years ago.

I have seen other instances where husband managed the rental properties, but did not keep a ledger of the money he took in or what the expenses were for each of the rental properties. The end result was that the court imputed the fair rental value for the properties as husband had failed to meet his burden of what the income and expenses were from these properties.

If you have any questions about this case or it's proginy, call Paul A. Eads, Covina Family Law Attorney to discuss.

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