California Family Code § 721: Fiduciary Duties Between Spouses

Plain-Language Summary

California Family Code § 721 says that spouses must deal with each other with the highest good faith and fair dealing. In transactions between themselves, neither spouse may take unfair advantage of the other. The statute aligns spousal duties with those of business partners—requiring open access to transaction records, full information about community-property dealings, and accounting for benefits gained without the other spouse’s consent. When one spouse gains an advantage in an interspousal transaction (for example, a title transfer), courts often apply a presumption of undue influence that the advantaged spouse must rebut by showing the deal was voluntary, informed, and understood.

Real-World Examples

  • Title transfer advantage: Spouse A signs a deed that advantages Spouse B (e.g., moving a home from community to B’s separate property). Courts may presume undue influence under § 721. Spouse B must prove the transfer was freely and knowingly made, with a full understanding of its effect.
  • Hidden transactions: One spouse takes out a loan or cash advance without disclosure. § 721’s fiduciary baseline supports remedies—often pursued under Family Code § 1101 (including fee-shifting and percentage awards depending on the misconduct).
  • Reconciliation/post-marital agreements: Agreements made during reconciliation may be enforced when both parties are represented and obtain mutual advantages, which can rebut an undue-influence presumption.
  • Access to records: A spouse refusing to share account statements or “books” related to community transactions may be violating § 721 duties requiring access and full information.
  • Dissolution disclosure misconduct: While detailed disclosure rules live in § 2100 et seq., courts regularly invoke § 721’s fiduciary duties when imposing sanctions for nondisclosure during divorce cases.

Published Case Law on § 721

  • In re Marriage of Haines (Cal. Ct. App. 1995) – Landmark decision holding that when an interspousal transaction advantages one spouse, a presumption of undue influence arises from the marital fiduciary relationship under § 721. That presumption prevails over the Evidence Code § 662 record-title presumption; the advantaged spouse must show the transaction was voluntary, informed, and understood.
  • In re Marriage of Delaney (Cal. Ct. App. 2003) – Applies and refines the Haines rule in a transmutation to joint tenancy; the advantaged spouse must rebut undue-influence by proving a voluntary act done with full knowledge of the facts and a complete understanding of its effect.
  • In re Marriage of Feldman (Cal. Ct. App. 2007) – Upholds significant sanctions and attorney’s fees for nondisclosure of financial information during dissolution; § 721’s fiduciary duties inform the disclosure regime alongside §§ 2100–2107 and § 271.
  • In re Marriage of Fossum (Cal. Ct. App. 2011) – Confirms that breaches of spousal fiduciary duty in community transactions are remedied under Family Code § 1101 (e.g., mandatory 50% award plus fees under subd. (g); up to 100% under subd. (h) for fraud, malice, or oppression).
  • In re Marriage of Burkle (Cal. Ct. App. 2006) – Enforces a reconciliation-stage post-marital agreement where both parties had counsel and obtained mutual advantages; explains when the undue-influence presumption does not control and when certain dissolution disclosure statutes do not apply.

Full Text of California Family Code § 721

(a) Subject to subdivision (b), either spouse may enter into any transaction with the other, or with any other person, respecting property, which either might if unmarried.

(b) Except as provided in Sections 143, 144, 146, 16040, 16047, and 21385 of the Probate Code, in transactions between themselves, spouses are subject to the general rules governing fiduciary relationships that control the actions of persons occupying confidential relations with each other. This confidential relationship imposes a duty of the highest good faith and fair dealing on each spouse, and neither shall take any unfair advantage of the other.

This confidential relationship is a fiduciary relationship subject to the same rights and duties of nonmarital business partners, as provided in Sections 16403, 16404, and 16503 of the Corporations Code, including, but not limited to, the following:

  1. Providing each spouse access at all times to any books kept regarding a transaction for the purposes of inspection and copying.
  2. Rendering upon request, true and full information of all things affecting any transaction that concerns the community property. Nothing in this section is intended to impose a duty for either spouse to keep detailed books and records of community property transactions.
  3. Accounting to the spouse, and holding as a trustee, any benefit or profit derived from any transaction by one spouse without the consent of the other spouse that concerns the community property.

(Amended by Stats. 2019, Ch. 43, Sec. 1. (AB 327) Effective January 1, 2020.)

*Nothing on this page should be considered legal advice. This is simply a summary of information found on the Internet. Use at your own risk. This information has not been evaluated by an attorney, and it may be incorrect or obsolete due to changes in the law.