Hiding assets in a California divorce? Divorcing couples are required to divide their assets in order to go their separate ways. Since California is a community property state, anything accumulated during the marriage must be divided equally. Sounds simple, right? What if you suspect your soon-to-be ex is hiding assets to which you are legally entitled? It happens more than you might think, and that is precisely why effective legal representation is a must.
The higher earning spouse may have a number of sneaky maneuvers planned in order to keep more than his or her fair share of your accumulated earnings:
- Undervaluing marital property;
- Hiding benefits such a stock options;
- Exaggerating debts;
- Overstating expenses.
Pretty disgraceful, right? Forgetting about the morality aspects for a moment, all of these actions are unquestionably illegal.
Rules of Civil Procedure
When a divorce is contested, both parties are required to sign a Financial Affidavit. This is a legal document that must disclose all assets, whether or not they have been specifically requested. That means IRAs, stock options, beach houses—you name it; if it is owned, it must be included. Additionally, debts and expenses must be truthfully represented. Failure to be candid has a legal name – perjury.
Penalties for Knowingly Hiding Assets
Blatant attempts to misconstrue the financial facts are generally not appreciated by the court. It could result in your spouse having to pay your attorney’s fees or even go to jail. Since the judge’s discretion is a key factor in divorce cases, sometime surprising outcomes occur.
Case in Point: Hiding Assets and Lying to the Judge Does Not Pay
In one California divorce case, a woman violated disclosure laws by failing to include in her Financial Affidavit the $1.3 million she had won in a state lottery prior to filing for divorce. Because the judge determined her fraudulent actions were motivated by malice, he made a stunning decision. Rather than having to split the winnings 50/50 with her husband as per community property laws, the judge awarded the entire amount to her husband.
Finding Hidden Assets
Investigators familiar with the murky ruses involved with burying assets know how and where to look for the gold:
- Assets may have been transferred to family members;
- Credit card statements that are mailed to an office address may be concealing compelling information;
- Dividend income provides clues about investments and savings;
- State and/or federal taxes might be overpaid and credited for future tax years;
- Income may be generated and hidden outside of California;
- Travel and lifestyle analysis may reveal hidden funds.
Blind Trust can be Costly
Simply trusting your spouse to be straightforward with financial disclosures can sometimes be quite costly. If you have any reason to suspect assets are being hidden, it is worth a discussion with your attorney. At Beck Law P.C., our legal team is experienced in working with reluctant truth-tellers. We will fight aggressively to get you the fair settlement you deserve. If you live in Sonoma County, Mendocino County or Lake County California, contact us in Santa Rosa today for a confidential consultation.