When you’re getting a divorce, the last thing you want to find out is that your spouse has violated his or her fiduciary duties. A spouse’s fiduciary duty is essentially to make good financial decisions that are not excessively unfair to the other spouse. For example, if two spouses purchase a home together, that is a good agreement and fair to each party. If one person racks up $100,000 in debt without the other’s knowledge, it can be argued that the individual violated and broke his or her fiduciary duty.
It’s a bad situation when one spouse violates the fiduciary duty owed to the other. It may mean that there is an excessive amount of debt owed that one spouse had no idea about. How can you take steps to make sure this doesn’t happen after you file for divorce?
You should ask your spouse to update you on his or her finances regularly along with signing and dating a separation agreement to show when you and your spouse no longer live together. Separating your accounts before divorce or as soon as possible after announcing your intentions is vital.
Why is it so important? Here’s an example. If your spouse does not update you on lottery winnings that took place during your marriage, for example, the court may determine that he or she has breached his or her fiduciary duties. Why? Your spouse knew he or she wasn’t telling you about the other source of income despite it being property that you both should have access to thanks to marital property laws.
Concealing winnings like the above resulted in one woman violating her marital settlement agreement, which then had to be rewritten. The same could happen to you. With the right legal documents, you can protect yourself from ending up in debt for purchases you didn’t make and be sure to get what is yours if your spouse is hiding assets.
Source: Digital Commons, “Do Ask, Do Tell: California ‘s Spousal Fiduciary Duty And Financial Disclosure Obligations,” Lauren Rakow, accessed Sep. 19, 2017