Did you know you have a fiduciary duty to your former spouse until the divorce is final? What is a fiduciary duty and how does it govern the behavior of former spouses during a divorce in Louisville or anywhere in Kentucky?
It is important to understand all aspects of a divorce in Louisville, especially when it comes to money. There are countless stories of spouses who run up credit card bills on shopping sprees or a fishing trip prior to leaving their spouse thinking all of the debts will be split equitably in the property distribution.
However, Kentucky family law applies a fiduciary duty to both spouses throughout the course of the marriage. This includes any period while they are married and/or separated up and until the time the divorce is finalized and orders are issued by the Judge. This means you have a fiduciary duty to your former spouse until the divorce is final and you are therefore legally required to act in the other’s best financial interests until that time. They also owe this important fiduciary duty to you.
For example, a recent case highlighted the importance of fully and accurately disclosing financial assets and debts to one another, and managing existing accounts and assets “in the other’s best interests.” In this case the husband attempted to hide an offshore business he owned, and when it came to light he attempted to convince the court it had no value and was just a shell company to process transactions for his employer.
The trial court flat rejected this assertion. The next issue was the disappearance of half of the funds in the company’s offshore account after the couple had separated. The husband attempted to claim this was due to legitimate business expenses. The court found there was no evidence of actual expenses and no corresponding change in business income (increase) due to the expenditure of funds.
The court awarded the business to the wife, and ordered the husband to pay the wife half of the amount that had existed in the business’ account (almost $50,000) to reimburse her for the missing funds.
It is important to understand that you have a fiduciary duty to your former spouse until the divorce is final. It is also important to consider the actions of your former spouse in terms of this important legal distinction. Have finances been depleted or used for purposes outside of your marriage? Spouses and former spouses must continue to exercise good financial judgment throughout the divorce and any attempt to run up bills or hide assets can result in substantial sanctions from the judge.
We invite you to review the strong recommendations of our former clients and contact us or call 502-584-1108 to schedule an appointment with one of our experienced divorce and family law attorneys.