Under California’s community property laws, you and your ex should share almost all of your property and debts when you divorce. Unfortunately, not everyone will enthusiastically participate in property division proceedings with good intentions.
Some individuals desperately want to feel like they have won or have “punished” their ex. Attempting to manipulate the outcome of property division proceedings is pretty common in divorces where emotions run high.
If you share significant property with your spouse and cannot create an exhaustive inventory from personal knowledge, you may be at elevated risk of your spouse attempting to hide assets. What happens when one spouse misrepresents their financial circumstances in a California divorce?
If you track down the hidden assets…
If a social media post or the work of a forensic accountant exposes that your ex has a secret bank account or has excluded some of their most valuable personal property from the inventory of assets, you can report that misconduct to the court.
Ideally, you will discover the hidden assets before the court finalizes your property settlement order. They can take your ex’s intentional obfuscation into consideration when deciding what to do with your belongings and your debts.
Although typically the court does not like to revise property division settlements after the fact, evidence of financial misconduct can give you grounds to go back before the judge. California courts have set precedents where they penalize someone who hides assets from a spouse. There was a notable case several decades ago involving a hidden lottery ticket that resulted in the spouse deprived of a fair share of that money eventually receiving the full value of the winnings.
If you don’t discover the deception…
The worst-case scenario for someone worried about hidden assets is that they will not successfully track down the hidden property or bank accounts their spouse did not report on the inventory of assets.
You have the right to an appropriate share of community property, but you cannot lay claim to assets that you do not know exist. When your ex successfully lies to you and the court, they can unfairly influence the outcome of the property settlement for their own benefit.
Understanding the possible impact of hidden assets on your California divorce can help you stand up for your rights and plan for a more stable financial future.