“Revenge Doesn’t Stop”: The Hidden Cost of Hiding Assets in a California Divorce
California law requires full transparency between divorcing spouses to ensure proper division of the parties’ assets and debts, as well as accurate support orders. Often, however, a party who feels wronged seeks to “get even” by withholding financial information or hiding assets from his, her, or their spouse during their dissolution proceedings.
As Daniel Craig once said, “Revenge doesn’t stop.” Seeking revenge by concealing income and/or assets doesn’t stop backfiring against the concealing party. Hiding assets is not only unethical, but a dangerous legal gamble.
Consequences of Hiding Assets in a California Divorce
1. Forfeiture of Hidden Assets
Pursuant to California Family Code section1101, subdivision (g), the Court has wide discretion to penalize a spouse caught hiding assets. In fact, the Court can award the innocent spouse up to 100% of a hidden asset’s value, leaving the dishonest spouse with nothing.
2. Payment of Attorney’s Fees and Legal Costs
Uncovering hidden assets may require hiring a forensic accountant, propounding extensive third-party discovery, filing myriad motions, or other costly procedures. The Court can and, most likely, will require the concealing spouse to pay the fees and costs associated with the actions undertaken by the innocent spouse to find hidden assets and/or income.
3. Sanctions
In addition to the foregoing payment of attorney’s fees and legal costs, the Court may impose additional monetary sanctions on the spouse found to have hidden assets and/or income. Sanctions penalize the lawless spouse and deter future bad behavior.
4. Potential Criminal Charges
Falsifying financial disclosures or deliberately hiding assets can lead to criminal penalties for the perjurious spouse. Though uncommon, the possibility of criminal charges in concealed asset cases underscores the gravity of violating financial disclosure laws.
5. Loss of Credibility in Court
If the Court finds a spouse lied regarding financial issues in his or her or their dissolution case, the Court may infer he or she or they lied regarding other issues; thus, concealing assets or withholding financial information may impact the Court’s decisions beyond issues relating to property division and support, including child custody and visitation.
Financial Transparency is Essential
California law presumes complete, honest disclosure by each spouse of his or her or their assets and income. This ensures each party receives that to which he or she or they are entitled. Full financial transparency also helps avoid prolonged legal battles. Not only does the concealing spouse jeopardize his or her or their financial standing and reputation, but the concealing spouse’s actions damage valued personal relationships.
What to Do if You Suspect Hidden Assets
Working with an experienced family law attorney is imperative if you suspect your spouse is hiding assets and/or income. The attorneys at Genesis Family Law, APC, will ensure your interests are protected every step of the way by employing tools such as subpoenas, forensic accountings, financial discovery, and legal motions to combat concealment by your spouse.
Conclusion
Hiding assets and/or income in divorce leads to significant legal, financial, and personal consequences. Because it is true “revenge doesn’t stop” backfiring, divorcing spouses are best served by being honest and cooperative with one another. If you have questions about your rights or need help navigating a divorce in California, the attorneys at GENESIS FAMILY LAW, APC are happy to assist you. Please do not hesitate to contact our office.