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What happens when a spouse hides marital assets in California?

On Behalf of | Aug 16, 2023 | Community Property Division

When a couple gets divorced in California, they must divide the assets that they own. Most of the time, this endeavor starts with a process called disclosure, where they each report their assets to the court. The court can then work with them to divide things fairly if they cannot reach mutually-agreeable settlement terms with the assistance of their attorneys and/or a mediator.

However, some people do not want to divide all the assets that they own, and they will attempt to hide them from the court. What happens if a person does this?

They can lose all of the assets

Generally speaking, assets are divided between spouses in a divorce. Some may be separate assets, like an inheritance, but marital assets will be split, usually in ways that are fair considering the context of the marital estate as a whole. With that said, if one person is dishonest and fraudulently makes an inaccurate report to hide assets, then they could lose everything.

An example of this happened when a woman in California won the lottery for just over $1.3 million. Just 11 days later, she decided to ask for a divorce from her husband. She did not tell her husband or the court that she had won the lottery. He was stunned by the divorce petition because he thought that his marriage was very secure and stable. The couple even shared a toothbrush. He had no idea why his wife had decided to leave him, and they had been married for 25 years before she did so.

However, a letter was then accidentally sent to his address, informing him about the lottery winnings. He went to the court, and the judge ruled that the woman had to give her husband the entirety of those winnings. She would’ve likely been given 50% of the marital asset – since she won the lottery while they were still married – if she had simply disclosed it. But because she didn’t, and because she tried to hide it, her husband got the entire pay out and she did not.

A complicated process

Dividing assets can be complicated, especially when one person attempts to hide assets or doesn’t follow the instructions articulated by the court. Those who are involved in this type of a compromised divorce process need to know exactly what legal options they have and what steps they can take to fight for what they deserve.