A recent study published on CNBC showed that more than 7.2 million Americans hide their assets from their spouses. Given how prevalent the situation is in California, it’s important to take time to discover the entirety of your marital assets to ensure fair distribution.
California laws on disclosing assets and liabilities
To get a divorce in California, each spouse must reveal all material facts and information regarding the existence, characterization, and valuation of all assets and liabilities in which either party has or may have an interest. This duty of disclosure exists from the moment you marry and continues until all your assets and debts are distributed, and all claims for support are satisfied.
How common is hiding assets in a divorce?
While the exact number is unknown, multiple studies suggest that a significant portion of divorcing couples engage in some form of asset hiding. One study found that approximately one in five divorcees hid or spent $500 without the knowledge of their partner. Further, roughly 7.2 Americans hid credit cards or bank accounts from their spouses while married.
The problem with making these mistakes during the marriage is that spouses lose trust in each other. The innocent spouse will see it in no other way but betrayal, which can cause a great rift between them. It also shows that they are not on the same financial page.
Asset hiding can take many forms, but some common methods include:
- Hiding or transferring money to a secret account
- Making false claims about income or debts
- Concealing ownership of property, businesses, investments, or other assets
- Overstating expenses
Consequences of hiding assets in a divorce
If a person is caught hiding assets in a divorce, the court may order them to pay their spouse’s attorney fees and any other reasonable expenses incurred due to the asset hiding. In addition, if the court finds that they acted with malice, oppression, or fraud, it may award their spouse a greater share of the community property, sometimes all of it.
California is a community state, but if you can agree with your spouse, you can work out a different arrangement to splitting all your marital assets in half. Resolving to hide assets can even result in losing everything you value.
