I Owe What Kind of Duty to My Spouse?

By Richard A. Marcus, Esq.

Did you know that you owe your spouse a fiduciary duty in any transactions between you and in your management of community property? Well, you do. This means that you both owe each other the duty of the highest good faith and fair dealing with one another. This duty prohibits you from taking advantage of the other. And, for you business people, the fiduciary relationship is basically the same as the duty that you owe to your business partners.

In fact, these obligations continue after you separate from your spouse and pertain to all activities affecting your spouse’s assets and liabilities, until the date of distribution of the community asset or liability in question.

This duty requires full and accurate disclosure of true and full information affecting community property transactions. Generally, each of you share equal management and control of your community property. But if one of you operates or manages a business, that person has "primary" management and control of the business. This means that the managing spouse may act alone in all transactions. But the other spouse has certain protections. For example, prior notice is required before all of the assets can be sold, encumbered or otherwise disposed of. And, if your spouse does not treat you fairly, you may have a claim against him or her for breach of this fiduciary duty.

Here is the part that gets a little more interesting. If you obtain an advantage over your spouse when you keep a favorable opportunity for yourself that could have been given to the community, a rebuttable presumption of undue influence arises. And the spouse obtaining the advantage has the burden of proving that there was no undue influence and that the transaction was fair. Here is my favorite example. If you are married, and your spouse places property solely in that spouse’s name, you may very well have rights to that property, even if you signed a quitclaim deed claiming no interest to the property and giving it to your spouse. The issue will be whether your spouse can demonstrate that the transaction was fair and dispel the presumption of undue influence.