If you find out that your spouse secretly emptied the investment account, hid income from the business you built together, or moved property without your knowledge, it not only feels like betrayal, but it is also probably against the law in California.
When you’re splitting up assets worth hundreds of thousands or millions of dollars, finding out about financial fraud can mean the difference between a fair settlement and losing everything you’ve worked so hard to build.
California law says that spouses have the same duty to be honest and fair with each other as business partners do. If one spouse breaks these duties by hiding assets, making unauthorized transactions, or not giving financial information, they have committed what is legally known as a breach of fiduciary duty. The results can be severe, with hefty fines and a dramatically different property division outcome.
If you suspect your spouse has hidden assets or taken financial advantage during your marriage or divorce, schedule a confidential consultation now or call  (714) 909-2561 to discuss your legal options with Moshtael Family Law.
Understanding Fiduciary Duty Between Spouses in California
According to California Family Code Section 721, spouses have a fiduciary relationship with each other, which means they have “a duty of the highest good faith and fair dealing.” This is not just a general idea.
The law says that the private relationship between spouses has the same rights and responsibilities as business partners who are not married, according to Corporations Code Sections 16403, 16404, and 16503.
In real life, what does this mean? Your spouse must be honest about community property and not take advantage of you when it comes to money. They are required by law to be completely open about their marital assets, let you see their financial records, and keep track of any benefits they get from transactions involving community property without your knowledge or permission.
This duty applies to how spouses deal with community property, which is the money and assets they get during their marriage, as well as times when one spouse manages or controls the other spouse’s separate property. The managing spouse must take care of those assets in the same way that a professional fiduciary would.
When Fiduciary Duties Apply During Divorce
A lot of people think that these responsibilities stop when they separate or file for divorce. Family Code Section 2102 makes it clear that fiduciary duties continue from the date of separation until each asset or liability has been divided between the spouses. This longer time frame is necessary because the time between separation and the final division of property is when a spouse is most likely to hide, waste, or move assets.
The duties stay in place during the whole divorce process, from the first financial disclosures to the final judgment. If an asset hasn’t been fully distributed and given to individual control after your divorce is final, fiduciary duties may still apply to that property.
This extra protection is very important in Orange County divorces because couples often own valuable real estate, businesses, investment portfolios, and retirement accounts that take months or even years to fairly value and split up.
Common Types of Fiduciary Duty Breaches in an OC Divorce
There are many types of breaches, from obvious fraud to less obvious wrongdoing. At Moshtael Family Law, we’ve seen spouses break the law in many different ways, often without fully understanding what the legal consequences will be.
One of the most common types of breaches is having hidden accounts. This includes keeping bank accounts, credit cards, or investment portfolios secret from the other spouse. Even if the account was opened with money that was earned honestly, not telling people about it is a breach of fiduciary duty.
Selling or giving away property without permission is another serious breach. In California, both spouses must give their written consent before selling or putting a lien on community real estate used as the family home, along with furniture and personal items. In the same way, selling or making big changes to a community property business without giving written notice ahead of time is a breach of fiduciary duties, no matter which spouse runs the business.
Taking on a lot of debt without telling anyone hurts the community estate and breaks the duty of good faith. This includes opening credit cards that your spouse doesn’t know about, taking out loans that the family can’t afford, borrowing against community assets for your own benefit, or co-signing loans for other people without telling your spouse.
Some spouses “dissipate” their assets by using community money on affairs, gambling, or other things that don’t help the marriage. It is normal to spend some of your own money, but purposely wasting a lot of marital assets before or during divorce proceedings is a breach of fiduciary duty. This can lead to the spouse being charged with the full amount wasted.
Sometimes, business owners break their fiduciary duties by changing the value or income of their business. This could mean moving money to personal accounts, making expenses look bigger to make the business seem less valuable, giving business interests to other people, or putting off big contracts or sales until after the divorce to hide income. These tricks are usually not missed during a proper forensic analysis.
Failing to provide complete financial disclosure during divorce represents a breach, even if no other misconduct occurred. If you’re concerned about incomplete disclosures or hidden assets, schedule a consultation on our secure online form to discuss investigation strategies and legal remedies.
Legal Consequences and Remedies Under California Law
California courts take breaches of fiduciary duty very seriously. They give out harsh punishments that are meant to make up for the wronged spouse and stop bad behavior. Family Code Section 1101 lists the ways to fix things when a spouse has broken their fiduciary duties regarding community property.
At the very least, the wronged spouse may get half of any asset that was hidden or stolen, based on the asset’s highest value from the time of the breach until the trial.
For example, if your spouse hid stock worth $100,000 that later grew to $150,000, you could get $75,000 as your share based on the stock’s highest value.
When the court finds that the breach was done out of malice, fraud, or oppression, the penalties go up a lot. In these cases, the spouse who was wronged may get all of the hidden or stolen property, as well as the costs and attorney’s fees related to finding and proving the breach. This isn’t just a punishment; it’s meant to make sure that hiding assets is never a good idea financially.
Other possible punishments include fines, orders for the breaching spouse to pay the other party’s attorney fees throughout the case, excluding evidence about the hidden asset (which means the breaching spouse can’t present their side about that property), and in very serious cases, throwing out a judgment that was based on incomplete or false information.
In certain instances, courts may also grant damages pursuant to Civil Code Section 3294, which permits punitive damages for violations characterized by fraud or malice. This opens up a lot of risk that goes beyond just splitting the hidden asset.
The Three-Year Statute of Limitations
Family Code Section 1100 says that breach of fiduciary duty claims have a three-year statute of limitations, starting from the day you found out about the breach. This timeline is important because if you find hidden assets or financial wrongdoing years after your divorce, you may still be able to take legal action, but only if you do so quickly after finding out.
The “actual knowledge” standard means that the clock doesn’t start until you actually know about the breach, not just when you should have known or thought something was wrong. If you wait too long to file a claim after you learn about it, though, courts can use the legal principle of “laches.” So, it’s still important to act quickly.
This statute of limitations is very important for spouses who find out about financial fraud after the divorce is final, especially when clever hiding methods made it impossible to find out about it sooner.
Protecting Your Rights During an Orange County Divorce
If you suspect your spouse may be hiding assets or violating fiduciary duties, taking immediate action can make the difference between recovering what you’re owed and losing it permanently. Start by documenting everything you can about household finances, business operations, and any suspicious transactions or behavior patterns.
Gather financial records, including bank statements, tax returns, credit card statements, investment account statements, business financial records, real estate documents, and retirement account statements. Even if you don’t have complete records, partial documentation helps your attorney identify what’s missing and pursue proper discovery.
Be alert for warning signs that often indicate potential breaches. These include your spouse suddenly becoming secretive about finances, mail being redirected or hidden, unexplained decreases in income or account balances, lifestyle that doesn’t match reported income, resistance to providing financial information, or discovering accounts or assets you didn’t know existed.
Don’t confront your spouse before consulting an attorney. Alerting them to your suspicions may prompt them to better hide assets or destroy evidence. Instead, schedule a confidential consultation now by calling  (714) 909-2561 to discuss your situation with experienced divorce attorneys who understand how to investigate and prove fiduciary duty breaches
How Moshtael Family Law Investigates Fiduciary Breaches
At Moshtael Family Law, we’ve handled numerous high-net-worth divorces where fiduciary duty breaches significantly affected property division outcomes. Our approach combines thorough financial investigation, strategic use of discovery tools, and when necessary, collaboration with forensic accountants and financial experts.
We can analyze financial records looking for patterns that suggest hidden assets or income, trace funds through multiple accounts and transactions, subpoena records from financial institutions and business entities, depose your spouse and relevant third parties under oath, and engage forensic experts when complex business or financial issues require specialized analysis.
OC’s concentration of high-income professionals, business owners, and real estate investors means fiduciary duty issues arise frequently in local divorces. We’re familiar with the tactics people use to hide assets and the investigative techniques that expose them.
The goal isn’t just to prove a breach occurred but to quantify the financial impact and secure appropriate remedies. In many cases, the threat of serious penalties encourages settlement once the breaching spouse realizes their misconduct has been discovered and documented.
Taking Action to Protect Your Financial Future
Discovering that your spouse violated their fiduciary duties during marriage or divorce is both emotionally devastating and legally significant. These breaches directly impact your financial security and your children’s future. California law provides strong remedies, but only if you act to enforce your rights.
Whether you’re just beginning divorce proceedings and want to ensure full financial disclosure, suspect ongoing financial misconduct, or have discovered hidden assets after your divorce was finalized, experienced legal representation makes the difference between recovering what you’re owed and accepting less than your fair share.
Don’t let financial deception determine your future. Schedule a confidential consultation now or call  (714) 909-2561 to discuss your situation with the divorce attorneys at Moshtael Family Law. We’ll evaluate the evidence, explain your legal options, and develop a strategic approach to protect your rights and secure the property division you deserve.
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