You and your spouse might disagree about the right way to split your property when you file for divorce. Most of the time, couples eventually find ways to resolve these disagreements. Occasionally, however, the prospect of splitting up property will push one spouse into unethical and potentially illegal behavior.
Both spouses have a claim to the shared or marital property that they earned or otherwise acquired during the marriage. With the exception of gifts, inherited assets and property designated as separate in a marital agreement, the vast majority of what the couple shares is subject to division in their California divorce.
One spouse might hide assets from the other and intentionally not report them to the courts to avoid splitting them in the divorce. What are the potential consequences of such behavior?
Sometimes, one spouse loses out on marital property
Unfortunately, attempts to hide assets are often successful. If the other spouse does not go carefully over financial records and divorce paperwork, they may not realize that their ex deprived them of tens of thousands of dollars of marital property.
Many people may only realize that such misconduct occurred long after the divorce if they learn about it at all. They may feel like they learn about the misconduct too late. However, finding hidden assets even after divorce can lead to consequences for the person hiding them.
California courts penalize people who hide assets
For decades, the standard practice in California has been to penalize someone who hides property from their spouse and the courts in divorce proceedings. The best-known example involves a lottery winner who purchased the winning ticket prior to divorce but did not disclose the funds to the courts or their spouse. When their ex eventually found out about the lottery winnings, the courts ordered the spouse that hid the lottery winnings to turn the full amount over to their ex.
If you discover hidden assets during divorce negotiations or litigation, that evidence may influence how the judge divides your property. If you discover significant hidden assets after the divorce, you may be in a position to request that the courts review and adjust the property decree in light of that new information. Understanding the rules that apply to California divorces helps those planning for the end of their marriage.