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Are there consequences for hiding assets during divorce?

On Behalf of | Apr 14, 2023 | Asset Division

Most people who contemplate filing for divorce like the idea of “winning” while their spouse loses in some meaningful way. The entire divorce process can feel very unfair and dehumanizing, so any chance to push back against that reality is one that people may – understandably – fantasize about. With that said few people act on such impulses. Yet, the ones who do can dramatically affect how their divorce proceedings unfold.

For example, some people will try to alter the outcome of property division proceedings by choosing not to inform their spouse or the courts about certain assets that they may have. Some people acquire property in secret for months before they divorce. Others may have funded a secret bank account throughout the entire marriage. They aim to keep these assets separate during the divorce process and, therefore, do not disclose those assets to their spouses or the courts.

California has community property statutes that require that spouses share their income and assets when they divorce. Are there consequences for one spouse who chooses to lie and who attempts to manipulate that process?

Hidden assets can lead to unfair outcomes or penalties

Spouses who do not disclose all of their assets could potentially convince their spouses to agree to a very uneven and unfair division of their marital resources. Therefore, it is often important for those preparing for property division negotiations to protect themselves protect them against the possibility that their spouse will misrepresent their financial circumstances.

A very thorough review of all financial disclosures combined with the right approach to negotiation or litigation can help protect one spouse from the financial misconduct of the other.

What if someone uncovers hidden assets?

Occasionally, people in the throes of divorce discover unquestionable proof of their spouse’s financial misconduct. In such scenarios, the spouse hiding assets from the courts might face significant consequences.

California judges have previously ruled to deprive someone of the entire value of the property that they hid from their spouse in divorce proceedings. Even if it won’t be the full amount of the hidden assets, there will likely be some degree of financial penalty or the choice to hide property from the courts and the other spouse in a California divorce.

Both those who are contemplating the most effective divorce strategy and those who are concerned about the misconduct of a spouse may benefit from learning more about community property rules and property division precedent as they affect California divorces with the assistance of an experienced legal professional.