Once you are married, you would like to believe your marital union is founded on integrity and honesty. Regrettably, divorce can reveal the worst in your spouse, and they can act cunningly by hiding assets. If you and your partner are undergoing the divorce process and you believe they are concealing property that ought to be split and shared between you, you might not know what to do, particularly if they are more wealthy than you.
However, at this point, the most crucial thing to remember is that you have legal rights according to California family laws. This blog guides you on the steps you can take once you suspect your spouse is hiding assets in a divorce, keeping your legal rights and protections in mind.
Divorce, Assets, and Family Law
California Family Code (FAM) 760 provides that all assets, regardless of where they are situated, obtained during the marital union while staying in California are described as community assets. Considering this law, hidden property during divorce may include the money acquired during the marital union and then kept away without your knowledge.
Other community assets include tangible financial property such as bonds, stocks, or bonds; real estate; boats; vehicles; salaries; lottery winnings; money from business ventures; investment earnings; or any property earned or collected while you were living together in matrimony.
Dividing Assets In Divorce
California law is particular regarding how community assets are split per court direction. According to FAM 2550, except if the married partners have a prenup agreement enforced, the divorce court must split the property equally between the divorcing parties.
You could be asking, What if you allege that your spouse is hiding property, and they claim the property is deemed separate (or individual) property? According to California family laws, separate properties are assets acquired or purchased before the marital union, like a vehicle you have had from college. These are not split in a divorce—the spouse they belong to keeps them.
Nevertheless, there are various exceptions to this rule. For example, even when the family house was bought before the marital union, equity accrued on the house can be deemed community property. Bank interest and pension fund wages may also be deemed community property.
Other examples of separate properties include:
- Property obtained after the partners permanently separated
- Gifts from a spouse to another
- Gifts or inheritances bequeathed or received to one partner, whether during or before marriage
- Property obtained in a spouse’s name and with the spouse’s separate money
- Earrings or property the couple agreed would remain separate in a prenup agreement
- Any rental income or monies earned from a spouse’s separate property
Know How Your Spouse Can Hide Assets
Spouses attempt to conceal assets from each other in various ways. Knowing them can assist you in identifying and locating concealed property in divorce proceedings. They include the following:
- Opening secret investment or bank accounts
- Converting money into cryptocurrency, such as Bitcoin
- Fabricating fake bills or debts to seem as though they have less funds than they do
- Sending funds to bank accounts in other countries or hiding property abroad or in a business
- Giving away their properties to business associates, family, or friends to hold them until after divorce proceedings
- Failing to report all their assets or income when filing tax returns
- Creating accounts in a child's name to move marital property until after divorce proceedings
- Transferring property into private accounts that the other partner does not know of their existence.
- Overpaying tax bills to obtain a larger refund the succeeding year
- Making phone loans to friends or family who will keep the payments for the spouse until after divorce proceedings
- Overstating personal expenses and debts
- Taking cash withdrawals on credit and debit cards
- Creating fake costs for their business to decrease the business’s value and pocketing the cash paid for the costs
- Selling property to somebody for less than their worth so they can rebuy the property from the individual after divorce proceedings
- Deferring bonuses, commissions, or salary
- Changing delivery methods or addresses for account statements and billing statements
Knowing all these tactics can assist you in ensuring your marital assets are divided equally and fairly and that your spouse does not hide any. You can also try to prevent your spouse from hiding assets, and among the best ways of doing so is by being engaged in your family’s finances. If you do so, your wife or husband will have difficulty concealing property if you are conversant with your community accounts and property.
What To Do If Your Spouse Is Hiding Assets During Divorce
Once the decision to go through with the divorce becomes final, the law requires your spouse to fully disclose any community assets they own that should be split between you. If you believe your partner is concealing property, there are various steps you could take.
Obtain Help From a Skilled Family Law Lawyer
If you suspect your spouse is hiding assets, the first step is to consult your family law attorney. Firstly, your attorney can assist you in determining what community assets are and what separate assets are per the state family law, just in case you are mistaken. Should you inadvertently conceal property, the law may require you to pay your soon-to-be ex-spouse’s attorney's fees. This is an example of the civil consequences sometimes imposed upon people who try to cheat the law, for example, by hiding property in a divorce.
If your wife or husband is hiding properties, your lawyer can help disclose them so that the division of all property goes smoothly in the divorce proceedings. A family law lawyer has the resources and knowledge to uncover all the hidden property that might impact your divorce case. Additionally, they can counsel you on strategies for uncovering hidden assets and defending your rights.
Do Not Try Revenging
You might feel you can conceal property if your partner has done so. Doing so will be a bad idea for various reasons, but the crucial one is that you may be subject to civil consequences. You do not want to conceal assets deemed community assets, even if you are unsure whether the property is separate or community per the law. It is essential to seek counsel from a qualified lawyer before filing paperwork or listing property that may be split in the divorce proceedings.
Be Patient and Hopeful
If your wife or husband is hiding property, finding the missing real estate, funds, or other assets might take an extended period. This might require thorough detective work, for example, from a forensic accountant or private detective.
However, you should be hopeful since if your partner is discovered to be concealing property, they may be compelled to give you more property as a consequence. Family Code 110(h) provides that married partners have a fiduciary duty toward one another. If this responsibility is breached, for example, when one partner hides property during their divorce proceedings, the law allows the judge to grant the other partner a hundred percent of the hidden property’s value.
If You Possess Evidence, Give It
Married couples can conceal evidence in various ways. They may reroute checks to another address, like a lover's or parent's house, undervalue investment property, and distort expenses. That is why obtaining proper help from an experienced family law lawyer is crucial. An attorney will assist you in uncovering hidden property of any kind, even art that might be kept away in a storage unit, concealed bank accounts, or any other hidden item.
If you suspect your spouse is hiding property and have electronic, textual, photographic, video, or other evidence, provide your lawyer with that information. You could try to collect every copy of financial records, such as investment accounts, bank statements, tax returns, credit card statements, and other relevant materials. The more details you can gather and give, the more property you can disclose for the best possible outcome in your divorce case.
Use The Discovery Process
During divorce proceedings, you and your lawyer can utilize discovery tools to collect information and evidence from your spouse. Available discovery tools include the following:
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Requesting for an Inspection
Should you suspect a storage unit, real estate, or other form of asset exists, request that your lawyer file an inspection request. This request is permitted under state family law and asks that your spouse let you inspect a specific property. All properties that fall under community assets would be eligible for this inspection. For example, you might need to inspect an automobile, storage unit, or deposit box. Even rental properties may qualify.
Often, these inspections will end up with a spouse catching their partner in the act. You will not know if that is what will happen in your divorce case unless you request this inspection, but requesting this inspection might be your only way to find the property you believe your wife or husband is concealing.
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Demanding an Oral Deposition
Requesting an oral deposition is meant to permit your lawyer to interrogate your spouse about any concealed property at a formal sitting. You will likely not meet in court, although a court reporter will likely record the proceedings under oath. If your wife or husband shows up for the disposition and keeps lying about concealed assets, they may be subject to more civil consequences.
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Requesting Interrogatories
Requesting interrogatories entails your lawyer asking the judge for more details regarding any concealed assets. For example, your attorney may file this request to ask for real estate certificates, bank account documents, bonds, stocks, or the address of a rental property the spouse allegedly owns.
Hire a Private Investigator (P.I)
A P.I. will provide your lawyer with video and photographic evidence of your wife or husband driving a motor vehicle or riding a boat you were unaware of. Frequent visits to a storage unit or rental property are another clue that could help you uncover one or several properties.
P.I.s are skilled at fishing out individuals when they least expect it. For example, parties trying to commit insurance fraud are sometimes monitored while moving with their back or neck braces. Whereas they might play injured for a court, the private investigator can come up with evidence to have the judge dismiss any fraudulent insurance claim.
The same can happen for hidden property. A private investigator could follow your wife or husband to and from work while attending to their business and personal matters. If your partner is hiding property in divorce proceedings, a private investigator is the ideal chance to ensure the hidden property remains concealed, at least to their knowledge. This means they might take extra measures to ensure you do not uncover or suspect any property that may be split, which means the private investigator may catch them hiding property or lying.
Your lawyer would know which P.I. to contact and ways to ensure efficient and fast evidence of concealed assets exists so full disclosure commences.
After you have obtained evidence that your wife or husband has lied about a single or several community properties, you could proceed with the divorce process. In this case, the court might grant you a hundred percent of the hidden property value, although this will be based on the facts of the case.
Ask your attorney about retaining a P.I. if you believe doing that will assist you in finding any concealed property you think is somewhere waiting to be revealed.
Retain a Forensic Accountant’s Services
Your family law attorney might recommend retaining a forensic accountant to follow money trails. Forensic accountants can be sought to uncover offenses such as embezzlement and money laundering, and they boast special skills that could help divorce lawyers. Should your spouse hide assets, in many instances, a forensic accountant can uncover that property.
Forensic accountants might raise your legal fees significantly. However, if you suspect your spouse has hidden high-value property, that might influence your decision to retain the accountant and proceed with the divorce proceedings.
Monitor Financial Accounts
You can assist your lawyer in finding concealed property by observing financial accounts. For example, you could monitor cash flow and activities in your financial accounts to note patterns and deviations from the patterns that may show your wife or husband is concealing property.
Pay attention to any gradual reduction in the money in your financial accounts. Your wife or husband may take small quantities over time to hide funds. Additionally, review canceled charges and checks to your financial accounts for unusual expenditures and alterations in spending habits.
Watch out for adjustments or changes in your spouse's lifestyle or financial habits. Look for unusual transactions, like expensive purchases or significant cash withdrawals. If you are unaware of why a given amount was paid or withdrawn, notify your lawyer so they may request details from your partner through discovery.
Speak to Trusted Parties
Talk to family members, business associates, or friends who may know about your partner’s financial dealings. From your findings, you may be able to tell whether your spouse is hiding assets.
Speak With Your Partner and Avoid Messy Divorce Proceedings
Before you start fighting about concealed assets with your spouse in court, consider discussing the situation with them if you are both cordial. Explain to them how community property is described under the state family laws and how these laws say that those properties should be split. Also, explain that severe civil consequences may result if they do not come clean and disclose the assets.
This approach might not work since divorce usually causes uncontrollable emotions, but it is worth trying. The more truthful you are as you near the divorce process, undergo it and strive to move on in life, the better off you will be.
Complete disclosure and honesty will enable you to have a legal process that is less lengthy and keep attorney fees to a minimum. Also, the divorce proceedings will have fewer negative effects on the children you share.
What Will Happen If Your Spouse Conceals Assets in Your Divorce?
Intentionally concealing assets in divorce proceedings can lead to criminal and civil consequences in California.
If you discover concealed property in a divorce, the judge may order that your partner refund the costs you paid to locate those properties, including fees for your accountants, investigators, and lawyer. The judge may also grant you a significant part of community assets due to your partner’s actions.
If your partner lies on a financial disclosure, they could be accused of perjury under PC 118. Perjury charges can lead to fines and jail time. Based on the seriousness of the act, a spouse may be subject to other criminal charges, such as fraud.
Find a Skilled Family Law Attorney Near Me
Discovering hidden assets in a divorce may be difficult. However, with the correct strategies, you can protect your financial interests and ensure you acquire your financial share. Among the most significant help you can solicit to uncover concealed assets is that of an experienced family law attorney.
At San Diego Family Law Attorney, we are on standby to help you. If you are undergoing divorce and believe your spouse is concealing one or multiple assets, call us at 619-610-7425. We can disclose any property, including currency, vehicles, real estate, financial records, et cetera, thanks to our skills and decades of experience handling these kinds of cases in divorce proceedings.
