Fiduciary Duty in Family Law Cases

The Obligations of a Fiduciary

Simply put, a fiduciary duty is the responsibility to place someone’s interest ahead of your own. So important is this responsibility that it requires the highest degree of honesty and loyalty. Key-word there, loyalty

You can be responsible for a breach of fiduciary duty only if you owed that duty. To prevail on a claim, you must establish that a duty existed between yourself and another party. Now, we tend to see fiduciary relationships in business. Whether it’s an agent and the client he or she represents, or attorneys and their clients. Even an employer/employee relationship. But, family dynamics also play a role in establishing and maintaining fiduciary relationships. Fiduciary issues arise out of family law, particularly between spouses. 

Fiduciary Duty Between Spouses

When two people entered into a marriage, they enter into a fiduciary relationship. Hence, spouses must protect the assets they own as part of the marriage and cannot act without their spouses’ consent. Texas is also a community property state. Community property is property that is owned equally between spouses. In the event of a divorce, community property is divided equally. And if one spouse has control of the marriage’s finances and assets, that spouse could take control of a greater portion of the marriage’s assets. Spouses have an expectation to prevent fraud and misrepresentation between each other as well as the management of their community estate, i.e. business ventures and property bought while married.  

The Elements Of Breach Of Fiduciary Duty Claims In Texas

To prevail in a fiduciary claim, one must establish:

(1) a pre-existing fiduciary duty-relationship

(2) the breach of that fiduciary relationship

 (3) causation, in the form of injury to the beneficiary, and

 (4) damages. 

Spouses have a fiduciary duty to each other on principle alone, spouses tend to share all aspects of their lives, and financial responsibilities may give rise to fiduciary obligations. As business partners are expected to share pertinent information about their business ventures so too are spouses. In Texas, it’s no different. In fact, Texas law places strict expectations to those with fiduciary obligations, and if violations occur you may face severe penalties. Any breach of such duty may affect divorce proceedings and your spouse may be entitled to an unequal division of property if you are deemed to have breach said loyalty to your spouse. 


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