How Divorce Affects Professional Practices: Doctors, Lawyers, and Consultants
Divorce How Divorce Affects Professional Practices: Doctors, Lawyers, and Consultants Read More Key Takeaways How Is a Professional Practice Treated
Financial Assets
Discovering infidelity is devastating on an emotional level, but the betrayal often carries serious financial consequences. When a husband or wife uses community money to fund a relationship outside the marriage, disputes over marital funds spent on a new partner often follow. At Whiting, Ross, Abel & Campbell, we frequently handle high-asset divorce cases in the East Bay, including complex matters involving professional athletes and public figures, where financial misconduct becomes a central issue.
Navigating the dissolution of a marriage in Walnut Creek, Piedmont, or Oakland is difficult enough without uncertainty around missing assets. California is a no-fault divorce state, meaning the court does not punish a spouse for cheating itself, but it does scrutinize how marital money was used. If your spouse has been diverting funds to support someone else, California law provides avenues to recover those losses.
California is a community property state, which generally means that income earned and assets acquired during the marriage belong equally to both spouses. As a result, spouses owe each other a fiduciary duty similar to business partners, requiring them to manage marital assets in good faith and not for personal gain at the other spouse’s expense.
This fiduciary duty is central to how courts evaluate cases involving marital funds spent on a new partner in California. A spouse cannot freely treat community money as personal spending when that use undermines the other spouse’s financial interest. When community funds are used for purposes that do not benefit the marriage, such as financing an affair, the conduct may be legally classified as a breach of fiduciary duty depending on the circumstances.
Courts in Alameda and Contra Costa counties do not punish spouses for infidelity itself, but they closely scrutinize the financial conduct tied to it. California law requires spouses to act with the highest good faith and fair dealing. Just as a business partner cannot divert company funds for personal use, a spouse cannot improperly funnel community earnings into a secret relationship without potential financial consequences.
Improper use of funds generally involves spending community money in a way that benefits a new partner or an affair at the expense of the marital community. This can include gifts, travel, dining, rent, or direct cash transfers. When money comes from a joint account or from income earned during the marriage, using it to support a boyfriend or girlfriend may be treated as a misuse of community property, depending on the circumstances.
We see a wide range of disputed expenditures in these cases. In some high-net-worth divorces we handle, including those involving athletes or executives, this can involve purchasing real estate for a paramour or financing luxury travel. In other cases, the issue shows up through recurring expenses like upscale dinners, hotel stays, or expensive jewelry that add up over time.
A more complex area involves financial support for children outside the marriage. If a spouse has a child with a new partner and uses community funds to pay child support, the situation requires careful analysis. While a parent has a legal obligation to support their child, the use of community funds to satisfy that obligation can give rise to reimbursement claims, particularly when the payments significantly impair the other spouse’s interest in the community estate.
Debt incurred during an affair is also closely examined. If a spouse accumulates credit card debt to fund gifts or experiences tied to a secret relationship, courts often treat that debt differently from ordinary marital expenses. In many cases, those balances may be allocated to the spending spouse rather than shared equally. A spouse should not be left responsible for debts incurred to finance conduct that did not benefit the marriage.
Under California law, dissipation of marital assets generally refers to the misuse or depletion of community funds for a non-community purpose, particularly when the conduct unfairly impairs the other spouse’s interest in the marital estate. In practical terms, it is what courts often describe as “waste.”
It is important to distinguish between poor financial judgment and waste. If a spouse invests community money in a business venture that fails, that loss is often treated as a shared marital risk. By contrast, spending marital funds on a girlfriend or boyfriend provides no benefit to the marriage and may be treated as waste, especially when the spending is excessive or concealed.
California’s community property rules are designed to prevent patterns of asset depletion. We frequently see dissipation claims arise once a spouse anticipates divorce and begins diverting funds to support a new relationship or reduce the assets available for division. When a spouse uses community money for a purpose unrelated to the marriage during this period, it can violate their fiduciary obligations. Whether the spending involves large purchases for a partner or repeated cash transfers, expenditures that do not benefit the marital community may be actionable dissipation.
If the court finds that misuse of marital funds is supported by the evidence, the judge can adjust the division of community property to account for the value of the wasted assets. This is not punitive. The goal is to ensure the innocent spouse receives their full 50 percent share of what the community estate should have been before the improper spending occurred.
For example, imagine a couple has $100,000 in savings. One spouse spends $20,000 of that money on a new partner. The remaining balance is $80,000. In a simple split, each spouse would receive $40,000. However, because $20,000 was improperly spent, the court evaluates the division based on the original $100,000. The innocent spouse is entitled to $50,000. Since only $80,000 remains, the spending spouse may receive $30,000 while the innocent spouse receives $50,000.
This analysis also applies to debt allocation. If one spouse incurred debt to fund an affair, the court may assign that obligation solely to the spending spouse rather than treat it as a shared community debt. The objective is to prevent the innocent spouse from subsidizing the affair through a reduced property award or shared responsibility for debts that did not benefit the marriage.
Our attorneys will help you trace diverted funds, build reimbursement claims, and fight to restore your share.
Proving this type of spending often requires a forensic approach commonly referred to as tracing marital funds in a divorce. This involves carefully following money from income sources through accounts and transactions to determine how and where it was ultimately spent. Because financial misconduct is rarely disclosed voluntarily, incomplete or delayed financial disclosures are common in these cases.
At Whiting, Ross, Abel & Campbell, we work with forensic accountants to conduct detailed financial analyses. We look for red flags such as:
This type of review goes beyond a surface-level scan of bank statements. We analyze spending patterns over time to identify unusual depletion of community assets. When transactions are structured to avoid leaving a clear paper trail, circumstantial evidence can also be relevant, such as sudden changes in spending behavior or unexplained declines in marital savings. Credibility often becomes an issue as well. If a spouse provides inconsistent or evasive explanations about missing funds, the court may give less weight to their testimony when evaluating financial records.
The primary judicial remedy in cases involving a spouse spending community property on an affair is a reimbursement claim. In these cases, the court can order the spending spouse to reimburse the community estate, or effectively credit the innocent spouse, for funds that were improperly diverted.
Under California Family Code section 1101, a breach of fiduciary duty can trigger several remedies:
These remedies are corrective rather than punitive. Their purpose is to restore the injured spouse to the financial position they should have held had the community assets been handled in good faith.
You should consult with a qualified family law attorney as soon as you suspect financial infidelity issues under California law. Delays can make it harder to trace transactions or account for funds that have already been spent. Early legal guidance makes it easier to preserve records, evaluate reimbursement options, and take appropriate steps to protect remaining community assets.
If you live in Walnut Creek, Berkeley, Pleasanton, or elsewhere in the East Bay, it is important to work with a legal team that understands the nuances of relationship-related spending and high-stakes asset division. Simply accusing a spouse of misusing money is not enough. A clear legal strategy and supporting evidence are essential.
At Whiting, Ross, Abel & Campbell, we provide a concierge-level of service for clients navigating complex family law disputes. We understand that California law provides serious remedies for hiding or wasting community assets, but those remedies must be properly supported and enforced. Whether the issue involves stock compensation, business interests, or money diverted to a third party, we are prepared to help you protect your financial future.
Contact us today to schedule a consultation and take the first step toward safeguarding your property rights.
The above is not meant to be legal advice, and every case is different. Feel free to reach out to us at Whiting, Ross, Abel & Campbell, LLP if you have any questions. Information contained in this content and website should not be relied on as legal advice. You should consult an attorney for advice on your specific situation.
Visiting this site or relying on information gleaned from the site does not create an attorney-client relationship. The content on this website is the property of Whiting, Ross, Abel & Campbell, LLP and may not be used without the written consent thereof.
Spending marital money on a new partner is not a crime in California, but it can violate a spouse’s fiduciary duties and lead to financial consequences in a divorce if the spending harmed the community estate.
Yes. If you can prove community funds were misused for a non-marital purpose, California courts can order reimbursement or adjust property division to restore your full share.
Courts focus on restoring fairness, not punishment, and may award reimbursement, reallocate remaining assets, or assign related debts to the spending spouse if dissipation is proven.
Divorce How Divorce Affects Professional Practices: Doctors, Lawyers, and Consultants Read More Key Takeaways How Is a Professional Practice Treated
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