If you are planning to divorce in Upland, CA, the experience is likely to be one of the most challenging situations you ever handle during your lifetime. Even if you are convinced your marriage should end, it is emotionally draining to approach the formal process of divorce, and this process is more complex than most people realize. California also enforces some of the strictest divorce laws in the United States. While these laws aim to ensure fairness in divorce, many people find them to be overbearing and imbalanced in some situations.
One of the most difficult aspects of the divorce process is property division. California enforces a strict community property law that states that all marital property is divided equally in divorce, regardless of the reason behind the divorce. While it can be difficult to imagine parting with half of your community property, this situation is even more difficult if you have reason to believe your spouse has hidden assets. You may not know how to confirm your suspicions and how to hold your soon-to-be ex-spouse accountable.
At the Law Office of Stephanie J. Squires, our firm provides client-focused, comprehensive legal counsel in divorce that you can trust. We know how difficult this situation is for you and your family and the effects it can have on your future. Our goal is to ensure your divorce resolution is fair, reasonable, and in alignment with California state law. When you believe your spouse has been untruthful in their financial disclosure, we can help you find out if your spouse is hiding assets and ensure the fairest property division result possible under California law.
Understanding Financial Disclosure in Divorce
One of the most important steps of the divorce process is financial disclosure. Both divorcing spouses must provide complete and accurate records of all their financial accounts, investment accounts, and detailed lists of their property. California law allows divorcing spouses to retain ownership of their respective separate property, but anything that meets the state’s definition of community property is subject to 50/50 division in an Upland divorce. Expert attorneys can assist their clients in gathering the documentation they need to complete the financial disclosure process in accordance with California state law. Some assets are more complex than others, and the average person may not know where to go to secure the documentation they need without the help of an experienced attorney.
It is crucial for divorcing spouses to be truthful in their financial disclosure. Unfortunately, some divorcing spouses may attempt to hide assets to prevent them from division in their divorce proceedings. While it may be unconscionable to you to split your property with your soon-to-be ex-spouse, it is vital to understand the consequences of hiding assets in divorce.
What Does Hiding Assets Mean?
“Hiding assets” is a straightforward term that simply means failure to disclose assets in divorce proceedings as required by state law. Divorcing spouses must provide complete records of all property obtained during the marriage. Typically, property obtained during the course of a marriage qualifies as community property. This includes income, real estate, business assets, investment accounts, lottery winning, and any investment income.
As a general rule, any property or assets gained during a marriage becomes community property under California law. If divorcing spouses claim any separate property they want to protect from community property division, they must provide complete ownership records that prove their separate property was their sole property prior to their marriage, or that their claimed separate property satisfies California’s definition of separate property in another way, such as inheritance from a relative.
Some divorcing spouses may attempt to hide property by keeping their finances separate from their spouses, or they may use unethical tactics to funnel money from a joint bank account to a separate individual account. Offshore accounts, business property, and investment accounts are commonly cited as hidden assets when conflicts arise regarding community property division in divorce.
What Are the Consequences of Hiding Assets During Divorce?
If you feel tempted to try and hide assets in divorce, it is important to realize that the consequences for doing so could cost you much more than you would have lost had you allowed those assets to count towards your community property division in the first place. First, if an investigation reveals that a divorcing spouse hid assets during property division proceedings, the court may decide that the spouse is responsible for civil damages to the other spouse, including any fees the other spouse incurred from expert witnesses and other legal expenses their hidden assets caused. The spouse who hid assets could also potentially face criminal prosecution for perjury if they lied about their assets during formal divorce proceedings. Depending on how they hid their assets, it is also possible for them to be criminally liable for fraud.
If an attorney discovers that their client lied about hidden assets, they will likely resign from representing the client because expert attorneys expect transparency from their clients. If the divorcing couple had a prenuptial agreement, hidden assets would effectively void the contract, meaning that neither spouse could then rely upon its provisions for guiding their divorce. The spouse who hid assets will also take a significant hit to their credibility. If they need to file motions or make certain arguments in the future, the judge will be less inclined to entertain their requests, putting them at a legal disadvantage as the divorce unfolds.
How Do I Find Hidden Assets in a Divorce?
Unfortunately, despite the potential penalties for hiding assets in divorce, some divorcing couples still engage in this practice to their own detriment. If you suspect that your spouse has hidden assets, there are a few ways you can potentially uncover their unethical activities and ensure a fair and reasonable property division determination in your divorce case.
Your Upland divorce lawyer will likely recommend working with a forensic accountant to determine the full extent of your spouse’s hidden assets. Forensic accountants are skilled economic experts who know how to uncover financial paper trails. They will carefully review all of you and your spouse’s disclosed financial records and carefully examine records through other databases and sources they will know how to navigate.
One of the best ways to prove hidden assets is to be as complete and transparent with your own financial disclosure. Your attorney can assist with this, and the more complete your records are, the easier it will be for forensic accountants and other investigators to pick up a paper trail of your spouse’s hidden assets. A few of the methods used for hiding assets in divorce include:
- Overstating debts. This creates an inaccurate debt-to-income ratio during property division proceedings.
- Inaccurately reporting income. Divorcing spouses must provide accurate income reports in the form of tax returns, pay stubs, and other documentation.
- Inaccurately reporting business profits and losses. If your spouse owns a business they may try to manipulate their business records to influence property division proceedings in their favor.
- Transferring marital assets to an individual account. This is tantamount to stealing when it comes to divorce. All marital property is subject to equal division in a California divorce.
- Making phony loans to family or friends. This may seem like an easy way to offload assets to prevent their division, and the spouse may attempt to collect on these loans following the divorce.
- Asking an employer to hold a bonus or commission check until after divorce concludes.
- Transferring property to family members.
- Hiding physical cash, jewelry, and precious metals. If your spouse obtained a family heirloom from inheritance, they could keep this as separate property, but anything purchased with community property is subject to division in divorce.
- Selling off property with the intention of purchasing it again after divorce.
Ultimately, there are many different methods a divorcing spouse might employ to hide their assets from property division proceedings, all of them unlawful. If you suspect that your spouse may engage or has engaged in such activities, it is vital to hire reliable legal counsel to help you determine the best solution to the situation.
How Your Upland Hidden Assets Attorney Can Help
The divorce process can be extremely challenging in many ways, and if you suspect your spouse is hiding assets this can further complicate an already complex and stressful situation. An Upland hidden assets attorney can provide the detail-oriented legal representation you need in this type of situation. They will help you complete your financial disclosure as completely and accurately as possible so you can have the peace of mind that comes with knowing you have been honest and transparent throughout your divorce proceedings. If you have reason to believe your spouse has hidden assets, they will help you determine your best available options for addressing the family law situation.
At the Law Office of Stephanie J. Squires, we believe in providing client-focused legal counsel to everyone we represent in Upland, CA divorce proceedings. The divorce process is difficult enough without having to contend with illegal obfuscation in your property division proceedings, so if you have reason to believe your spouse has not been truthful in their financial disclosure, we will help you hold them accountable. Contact us today to schedule a case review with our team and find out how an experienced Upland hidden assets attorney can help you through your divorce case.