In a California divorce, the properties and assets that the spouses owned in the course of the marriage will be divided, including real estate, vehicles, bank accounts, and any other assets and properties.
But when a marriage becomes difficult, and divorce becomes imminent, some people hide the money. If you’re contemplating trying to hide assets during a divorce, don’t. State law requires full financial disclosure, and a good Oceanside divorce lawyer knows how to find hidden assets.
HOW IS PROPERTY DIVIDED IN A CALIFORNIA DIVORCE?
The division of property begins early in the divorce process when the spouses file a declaration of financial disclosure listing all of their income, assets, expenditures, and debts.
But what if your spouse is trying to hide assets – and files a misleading financial disclosure? You’re about to learn what your options are. A fair and just divorce requires the truth.
First things first, however. The most important thing to remember about a divorce in southern California is that you must be advised and represented from the start by an experienced divorce attorney who will protect your rights and safeguard your long-term best interests.
WHEN MUST FINANCIAL DISCLOSURE STATEMENTS BE FILED?
In this state, the partner who files for the divorce must submit a complete financial disclosure statement when the divorce papers are filed or in the next sixty days.
The other partner then submits a complete financial disclosure statement along with his or her response to the divorce petition – or within the next sixty days.
California state law requires anything of value to be listed in the disclosure documents. A failure by either spouse to disclose a property or an asset could lead to significant legal penalties.
In most California divorces, after the financial disclosure documents have been filed, the assets and properties then become the subject of negotiations between the divorcing partners and their attorneys.
WHY ARE SETTLEMENT NEGOTIATIONS SO IMPORTANT IN A DIVORCE?
If the divorcing partners can come to terms regarding the division of their marital properties and assets, a voluntary agreement is always better – and less expensive and time-consuming – than having the court impose a settlement arrangement.
If your spouse has any marital property and does not disclose that property, you could lose what is legally yours if your spouse gets away with the deception. All marital properties and assets must be accounted for and divided in a California divorce.
IN WHAT WAYS CAN FINANCIAL DISCLOSURE STATEMENTS BE MISLEADING?
Unfortunately, but as you might imagine, some people who are divorcing will lie or cheat to keep at least a portion of the marital assets solely to themselves. In fact, divorcing spouses frequently:
1. hide, undervalue, or understate particular marital properties or assets
2. overstate their debts
3. report higher than their actual expenses
4. report lower than their actual income
When someone signs their financial disclosure forms, that person is swearing and telling the court, under penalty of perjury, that he or she is telling the truth and disclosing all assets, properties, liabilities, income, and expenses.
HOW DO DIVORCE COURTS DEAL WITH FINANCIALLY DISHONEST SPOUSES?
The law in this state empowers the courts with a variety of different remedies for perjury and contempt of court. A dishonest spouse could be ordered to pay the other side’s attorney fees, could lose child custody, or could even be sent to jail. Judges have wide discretion in such cases.
The variety of different remedies that California courts can use when a spouse lies about assets includes this remedy that a judge used back in 1999. A Los Angeles woman named Denise Rossi won $1.3 million in the California Lottery, told no one, and filed for divorce eleven days later.
Ms. Rossi intentionally failed to disclose the lottery winnings when she filed for divorce. Superior Court Judge Richard Denner ruled that she had violated the state’s asset disclosure laws, and that judge awarded the $1.3 million to her ex-husband – every cent of it.
Because California is a “community property” state, the husband was legally entitled to half of the lottery winnings – that is, if his wife had properly disclosed it. Ms. Rossi’s effort to hide her lottery winnings resulted in her losing all of it.
Divorcing spouses can be quite creative about concealing assets. Some use foreign banks. Others transfer assets temporarily to a family member or a friend. Some people have even buried cash.
IF YOUR SPOUSE IS HIDING ASSETS IN A DIVORCE, WHAT CAN YOU DO?
If you believe that your own spouse has not provided accurate and complete financial disclosure statements, tell your divorce attorney at once, and your attorney will launch what’s called the “discovery” process.
In a divorce, discovery is the legal process that allows both sides to access and review the other side’s information and evidence. Your divorce lawyer is experienced at conducting discoveries, and that’s one reason why you must not try to act as your own attorney in your divorce.
Before you tell the court that your spouse has made a misleading financial claim, you and your lawyer must fully investigate the matter and find documentary proof to present to the court. In some cases, you and your lawyer may need to hire a financial investigator to determine the truth.
Attorneys also use cutting-edge, high-tech tools to help clients obtain what is theirs. Some advanced software programs, for example, can analyze financial statements in seconds.
If you are compelled to hire an investigator to find hidden assets, and that investigator is successful, you can ask the court to order your spouse to pay the investigator’s fees.
WHEN SHOULD YOU CONTACT A DIVORCE ATTORNEY?
A spouse who is hiding assets is hoping to keep an unfair share of the marital property while preventing the other spouse from getting a fair settlement. It’s a strategy that is completely illegal, yet it happens time and time again in California.
In southern California, if you are thinking about seeking a divorce, or if you are served with divorce papers from your spouse, you must reach out at once for trustworthy legal guidance.
An Oceanside divorce attorney will explain your rights and options and ensure that you are treated fairly in the divorce process. Get the legal help you need – as soon as you need it. That is your right.
Schedule a complimentary consultation with us, please call (760) 722-7646 or complete our online contact form.