Individuals preparing for high-asset divorces need financial clarity before they enter into any agreements or attend litigation hearings in the California family courts. Spouses need to understand what assets and debts they need to address.
Those with more property are at greater risk of a spouse engaging in intentional financial misconduct, such as hiding marital assets either by physically removing them from the marital home or by excluding them from the mandatory financial disclosures submitted during the discovery process of a divorce. Hidden assets can have a profound impact on the final financial settlement of a California divorce.
Individuals who believe that their spouses may have hidden assets or income likely need an attorney’s support as soon as possible to identify those resources and prove the financial misconduct that has occurred.
Why hidden assets matter
As a community property state, California requires the division of the assets people obtained during marriage and the income they earned in accordance with community property statutes. Any resources intentionally hidden from the courts may not factor into the final property division settlement.
A spouse who skimmed thousands of dollars from joint accounts to purchase cryptocurrency or other digital assets could deprive their spouse of their fair share of the marital estate. A forensic analysis of financial records may be necessary to identify warning signs of hidden assets, track income and locate secret bank accounts.
A high-asset divorce attorney can potentially help a concerned spouse determine exactly how much capital one spouse diverted from marital accounts. That documentation can then have a major influence on the outcome of the property division process.
Judges can deviate from the even split usually ordered in litigated community property division scenarios if there is proof of one spouse hiding assets. Historically, the California courts have penalized those who hide assets.
In one well-known case from the 1990s, one spouse chose not to disclose that they purchased a winning lottery ticket before filing for divorce. After that came to light later, the spouse denied their share of the lottery winnings took the matter back to court and ultimately received a ruling that granted them the entire lottery windfall.
Clear evidence of financial misconduct does more than ensure a fair split under community property laws. It may lead to an uneven split that favors the spouse who did not misrepresent their finances for personal gain. Working with an attorney who understands the challenges of property division in a high-asset divorce can help people protect themselves from common forms of family-related financial misconduct accordingly.