California Divorce: Hidden Assets
An understanding of California community property law and popular asset concealment strategies can help you identify and locate marital assets that your spouse has hidden in an attempt to cheat you. Asset concealment strategies tend to take advantage of cracks in the system, and a highly skilled lawyer will know where to look for them.
California’s Community Property Principle and the Legal Status of Hidden Assets
The basic principle of California community property law is that all property acquired during the marriage (before a legal separation) belongs jointly to both spouses, to be divided equally upon divorce. There are many exceptions to this general rule, however – for example, property inherited by one spouse generally belongs to that spouse only.
These exceptions could play a role when considering the significance of the hiding of assets by your spouse. Your spouse might, for example, try to hide an antique grandfather clock that he inherited in his own name, not realizing that this property belongs solely to him, notwithstanding California community property principles.
Mandatory Disclosure of Assets in a Divorce
One of the ways that courts protect against the hiding of assets during divorce proceedings is the requirement that spouses disclose the nature and value of their assets during the proceedings. Although this does not guarantee that no assets will be hidden, it does provide a measure of protection.
The Petition for Dissolution of Marriage, for example, requires the spouses to list all of their property, whether individual property or community property. Providing any intentionally false or incomplete information on these forms could be construed as a crime.
Ways That Dishonest Spouses Attempt to Hide Assets
If you suspect that your spouse is hiding marital assets, you may need an investigation to be performed on your behalf. Here are some of the most popular ways of concealing marital assets before or during divorce proceedings. This is only a sample – the number of ways that assets can be hidden is limited only by human ingenuity.
● Exaggerating expenses or underreporting income and “pocketing the change”
● Making “repayments” of non-existent loans to friends or family, and arranging for the check to be voided or for the money to be returned to your spouse after the divorce is finalized
● Overreporting business expenses – by paying salary to non-existent employees, for example, or by over-reporting office rent
● Purchasing art or antiques for personal property – decorations for your spouse’s office, for example – and underestimating their value. Your spouse then requests that this property be allocated to him after the divorce, and sells them after divorce proceedings are finalized.
● Arranging to delay employment bonuses until after the divorce is finalized
Take Action
If you are considering the possibility of joint custody, you are going to need to make an informed decision rather than a hasty one. To explore your options, call 909.204.7920 directly, fill out our online contact form, or stop by one of our offices in Rancho Cucamonga, Riverside, and Los Angeles.
