Certified Family Law Specialist in Orange County
Schedule Your Free 15 Min Phone Consultation Today 
assets

What You Should Know About Hidden Assets in Divorce

California is a community property state, which means the courts will split a couple’s marital property equally—based on the property’s value. Assets that cannot be divided are each party’s separate property, which can include property:

  • Owned prior to the marriage
  • Received by a party as a gift or inheritance

Both parties are legally obligated to disclose all their property (marital and separate) so that the division of property is fair for both parties. Divorcing couples have a fiduciary responsibility to one another and are expected to be honest and fair concerning the disclosure of assets (see California Family Code § 721).

During a divorce, both parties are required to file and exchange preliminary and final financial disclosures. To complete the financial disclosure, divorcing couples must each complete the following forms:

  • Declaration of Disclosure (FL-140), which ensures that you have attached and completed the following forms
  • Schedule of Assets and Debts (FL-142), which asks for information on all assets and debts, such as when you obtained them, their market value, and if they are separate property
  • Income and Expense Declaration (FL-150), which asks for information about your current employer, payroll information, and tax returns
  • A Property Declaration (FL-160), which asks for information about what the filing party proposes for the division of property
  • Declaration Regarding Service of Declaration of Disclosure (FL-141), which informs the court that the disclosure has been shared with the other party

Some people may try to hide assets from their spouse and the courts by:

  • Exaggerating their debts
  • Transferring money or stocks to other accounts
  • “Gifting” friends or families with certain assets
  • Deferring income until the divorce is finalized
  • Making expensive purchases
  • Putting money or assets in P.O. boxes
  • Selling property well under market value
  • Falsifying information about their expenses or assets
  • Creating fake bill statements
  • Creating an account with their children’s social security information

What to Do If You Suspect Your Spouse Is Hiding Assets

If you suspect your spouse may be attempting to hide assets, you can try to uncover the assets by:

  • Reviewing old tax returns, bank statements, bills, or documents
  • Drafting a list of assets you believe are missing
  • Asking friends and family members for written testimonies about suspected hidden assets
  • Hiring a forensic accountant or investigator

Uncovering hidden assets can be challenging, which is why you should tell your attorney about your suspicions. They can help you investigate and/or connect you with other professionals who can help.

Is Hiding Assets Illegal?

Yes, hiding assets is illegal, and a guilty party can face serious consequences, such as:

  • Being forced to pay certain fees. The guilty party can be required to pay the other party’s legal fees as well as any other fees accumulated in investigating the hidden assets.
  • Alienating yourself in court. No one appreciates being lied to, especially judges. You risk losing the trust of the court and your attorney if you hide assets.
  • Losing your attorney. In some cases, your representation may resign from the case. If they remain, full transparency will be expected.
  • Facing criminal charges. In some cases, you may be charged with perjury or in rare cases, fraud. Perjury convictions are punishable by a fine of up to $10,000 and up to four years of imprisonment.
  • Invalidating your prenup. If you didn’t disclose assets in your prenuptial agreement, your prenup can be voided.

How Our Divorce Attorneys Can Help

At The Neshanian Law Firm, Inc, our attorneys have nearly four decades of combined experience, and we are committed to protecting our client’s best interests. Known for our tenacious, personalized legal approach, we are equipped to help you if you suspect your spouse has hidden assets.

To learn more about how we can help you with your divorce case, please reach out to us online or at (949) 577-7935. No matter how complex your case is, we can work to defend your right to an honest financial disclosure and protect your best interests.

Categories