When couples get divorced, they will have to divide their assets. This is typically one of the most contentious and debated aspects of the divorce process. Commonly seen in Pasadena divorce cases, some spouses may consider hiding their assets during property division because they want to make sure they can keep them after their divorce is finalized, or because they feel they are entitled to more spousal support from their partner.
However, it’s essential to understand that hiding assets are illegal and unethical in California. To comply with California’s laws, each spouse will have to file a full financial disclosure report when they get divorced. In this report, they will have to disclose any liabilities, assets they own, or any other financially relevant information.
California Property Laws
California is a community property state. This means any assets or property accumulated during your marriage is equally owned by both you and your spouse in the eyes of the court. Community property can be:
Items purchased with either parties earnings during the marriage
You do not have to divide individual property if you can prove it was received before your marriage or was acquired as a gift solely for you. This kind of property is considered separate property. Separate property can be:
Gifts from the other people or your spouse
Property purchased by one spouse before the marriage, and the other spouse has not helped contribute towards the property during the marriage
Assets from before the marriage
Penalties for Hiding Assets
When you file for divorce, you must sign a Financial Affidavit stating that you are telling the truth about your finances under the penalty of perjury. However, this does not always stop people from trying to hide their assets. Spouses can hide assets in many different ways. Common methods used include:
Omitting sources of income
Reporting higher than normal expenses
Understating the value of certain forms of community property
Transferring assets to another account
Hiding marital assets is illegal in any circumstance in California. There are different punishments you or your spouse can face if you try to hide your assets. Courts can require the guilty spouse to pay fees for any investigations used to find the assets or the innocent spouse’s attorney fees. Additionally, courts can award more assets to the innocent spouse.
Not only can your divorce case be impacted by hiding assets, but you can also be charged with criminal charges. Hiding assets can result in perjury for failing to disclose your financial assets and all of the required financial disclosure agreements. Hiding assets can result in up to four years of jail time, as well as fraud charges.
If you are thinking about hiding your assets, consider the negative impact it can have on your future. On the other hand, if you suspect your spouse is hiding assets, you should speak with your attorney on how to discover proof of hidden assets. Our Pasadena attorneys can help you look over financial documents for evidence of dishonesty.
Call Schweitzer Law Partners today at (626) 788-5225 for help with your property division case.