Hiding assets during divorce is a major problem – and if you’re caught doing so (or if your ex is caught doing so), you’ll face big problems in court. Here’s what you need to know.
Hiding Assets During Divorce
When your marriage is ending, your spouse may decide to hide some of his or her assets so you can’t get them. That’s because property in California falls under specific categories – it can be community property or separate property (and in some cases, it’s a hybrid of both).
If you weren’t active in your family’s finances, or if you aren’t up-to-speed on your spouse’s income, it may be fairly easy for him or her to hide assets during your divorce. Some spouses do this so they don’t have to share – but doing so is more than unethical. It’s illegal.
During a divorce, you must both file forms with the court that truthfully disclose all your assets. That includes bank account balances, real estate and other types of income, such as pay and support from previous relationships. If you fail to do so, or if you lie on the forms, you could be held in contempt of court or be charged with perjury.
Devaluing Assets
Sometimes the value of an asset isn’t obvious without an appraisal, and in cases like those, it’s sometimes easier for a spouse to “devalue” them. That happens when one spouse says something is worth less than it really is in an attempt to share less of its worth with the other spouse. The courts don’t allow this, and in many cases, judges require professional appraisals on things that could be intentionally devalued (like houses, jewelry, businesses and other high-dollar assets). Nobody is allowed to deliberately devalue an asset for the purpose of defrauding the court.
Usually, people hide assets during divorce to prevent their spouses from getting a fair share. Unfortunately, it’s not always easy to tell if your spouse is hiding assets. Usually, if you suspect that he or she is doing so, it’s your job to track them down so you get your fair share of the community property.
What Happens if You Hide Assets?
The judge in your case can hold you in contempt of court if you hide assets – or, even worse, charge you with perjury. Perjury is a crime, and it involves deliberately giving false information while under oath. You’re subject to prosecution for perjury if you’re testifying in court or being deposed, or if you signed an affidavit or declaration that contains information you know is false. Perjury is a felony, and it’s punishable by up to 4 years in California State Prison. It’s safe to say that perjury is something you should steer clear of, particularly when it comes to disclosing your assets during divorce. It’s just not worth the risk.
Where to Look for Hidden Assets During Divorce
If you suspect that your spouse is hiding assets, you can do a little detective work of your own. You should start by taking an inventory of your property – especially if you notice that things are disappearing from your home, like jewelry and other high-dollar items. Check for safety deposit box registrations, look in your home safe and see if you can find evidence that your spouse is investing money without your knowledge. Other than that, though, it can be difficult to tell if your spouse is squirrelling away things that belong to you – and you may need to work with a Stockton divorce attorney who has the resources necessary to help discover hidden assets.
Do You Need to Talk to a Lawyer Because Your Spouse May Be Hiding Assets During Divorce?
If you suspect your spouse is – or will in the future – hide assets, it’s important that you get legal guidance. We may be able to help you, so call us today at (209) 546-6870 or get in touch with a Stockton divorce attorney online to schedule a consultation.
High-asset divorces can be incredibly contentious – and unfortunately, when there’s a lot of back-and-forth, people make mistakes. But making a mistake in a high-asset divorce can cost you for the rest of your life, so it’s important that you’re aware of the potential pitfalls and that you know how to steer clear to protect your assets.
Check out these five high-asset divorce mistakes so you know how to protect yourself – and your future.
5 High-Asset Divorce Mistakes: What NOT to Do
The most common high-asset divorce mistakes we see in our offices include things like:
Letting emotions rule over logic
Making rush decisions just to get the divorce over with
Hiding assets from one spouse
Failing to consider tax consequences
Going straight to litigation rather than negotiation
Here’s what you need to know about each of these high-asset divorce mistakes.
High-Asset Divorce Mistake #1: Letting Emotions Rule Over Logic
Divorce is an emotional process, whether it’s due to infidelity or anything else – and that can make it tough to make logical decisions. However, now is the most important time to focus on what’s most important: your future.
It’s not uncommon for one party in a divorce to feel guilty about what’s happening, but it’s a big mistake to let that guilt guide the decision-making process. For example, if you feel bad and agree to give your spouse double the spousal support he or she would ordinarily receive, or you decide to hand over more than half your marital assets, you’re cutting into your own future.
On the other side of the coin, you can’t use the court system to exact revenge on your spouse. Divorce is a legal process, and if you try to use the legal system to get back at your ex for what he or she has done, it’s more than likely going to backfire on you.
High-Asset Divorce Mistake #2: Making Rush Decisions
In many cases, both parties just want the divorce to end – and they’re willing to make less-than-informed decisions in an effort to wrap things up quickly. There are several reasons people want to rush through divorce, such as hoping the divorce will attract less media attention or simply wanting to be done with a spouse they can’t stand any longer.
Unfortunately, though, you can’t rush through a divorce and cover all your bases. You need to take the time to avoid making serious mistakes that will cost you long after your divorce is final.
In some cases, one spouse hides assets from the court so he or she doesn’t have to split them. California is a community property state, which means the assets you accumulate during your marriage – in most cases, anyway – belong to both spouses.
Hiding assets can get you into serious hot water with the courts – and in addition to the court finding out about those assets and dividing them anyway, you’ll lose your credibility. The majority of hidden assets are eventually discovered during the divorce process.
High-Asset Divorce Mistake #4: Failing to Consider Tax Consequences
Divorce changes your financial situation – sometimes drastically. Most of the financial transactions that take place during divorce have tax consequences, including the division of retirement accounts and the sale of homes, vehicles and other property.
Your attorney may suggest that you hire a tax professional or another financial expert to help you understand the tax consequences of the financial decisions you make now.
High-Asset Divorce Mistake #5: Going Straight to Litigation
For most people – even in high-asset divorces – negotiation is the way to go. You may not mind spending money on attorney’s fees through litigation, particularly if it means you’re going to “win,” but the vast majority of people who negotiate their own settlements end up being far more satisfied with the outcome than those who litigated in court.
When you and your spouse reach agreements on the major issues surrounding your divorce, including child custody and property division, your divorce will go faster and be less stressful for everyone involved. If you and your spouse can’t reach agreements on your own, your attorney might suggest that you work with a mediator who can help.
Call us at 209-546-6870 for a divorce case evaluation. You’ll talk to an experienced Stockton divorce lawyer who can give you the advice you need to begin moving forward.
