A divorce can be daunting, filling either spouse with fear that he or she will lose valuable assets and properties to a soon-to-be-ex. If you didn’t sign a prenuptial agreement and have considerably more assets than your spouse, there is a chance you will be unhappy with the final divorce settlement. This possibility – on top of anger toward your spouse or a sense of entitlement for assets you earned – can lead to an attempt to hide assets. This is a terrible idea that can get you into a web of legal trouble.
California: A Community Property State
Rules for how the courts divide assets during a divorce differ state by state. In general, there are two main groups: states that abide by community property laws and those that follow equitable distribution. California is a community property state, meaning the courts require a 50/50 division of all marital assets in a divorce. “Marital assets” are those either spouse acquired throughout the duration of the marriage, including property, money, collectibles, and vehicles.
Marital assets do not include assets a spouse owned before the marriage, unless you commingled them with your marital assets in a joint account. Some courts will treat your premarital assets as your own despite commingling if you can trace the assets back to its original source. Another exception to marital assets is anything acquired via inheritance or as a gift. Money judgments from personal injury claims, family inheritances and heirlooms, and gifts are not community property unless commingled. Speak with an attorney to find out the rule about commingled assets in your county.
In an equitable distribution state, the courts strive to split assets fairly based on the circumstances of the marriage. Divorce settlements in these states may not come out 50/50, although the law entitles both spouses to a share of assets. During an equitable distribution divorce, the courts will look at factors such as the length of marriage, each spouse’s individual contributions, and what a spouse sacrificed for the marriage.
About Hiding Assets
Many people mistakenly believe that hiding assets during a divorce prevents the courts from factoring them in during a community property or equitable distribution divorce. While getting away with this act might result in this outcome, the odds of success are slim. Getting caught hiding assets and lying about it in court can result in hefty fines and even a perjury charge. Perjury is punishable in CA with one to several years in prison and major fines depending on the circumstances of the crime.
In every divorce case in California, there is a discovery phase before the trial. During this step, both sides investigate one another and gather information from third parties regarding assets and other crucial information. Your spouse or his/her attorney will contact banks, employers, companies, retirement plan providers, and other entities to discover assets. You must legally turn over information about known assets and relevant financial information to your spouse or your spouse’s attorney. If you go through a deposition, which you typically will, you’ll have to provide a testimony under oath that you’re being truthful about assets and property. Lying under oath in a court of law is perjury.
If your spouse or his/her attorney discover assets you tried to hide in an offshore account or elsewhere, you not only have to share the assets – now you’re also facing perjury charges and penalties. Instead of attempting to hide assets during a divorce, a risky and unwise decision, hire a skilled divorce lawyer in California. A competent attorney can help you protect your assets and property legally, acting in your best interest to obtain the fairest settlement possible under California law.