When couples divorce in California, both spouses are required to disclose all assets. If one spouse owns a business, he or she may be tempted to hide business assets. This would deprive the other spouse of sharing in those assets as part of the divorce settlement or award. Hiding assets in a divorce is illegal, and if those assets are discovered, the consequences may be severe.
If you are concerned that your spouse may be hiding assets, contact California divorce attorney Bruce A. Mandel, to schedule a consultation. There are methods for discovering secret business assets during and after your divorce. We can help to make sure that property division in your divorce is fair and equitable.
Property Division in California
California is what’s known as a community property state. Community property means that all debts and assets acquired during the marriage will generally be divided equally between spouses upon divorce. Each spouse is required to complete a divorce petition, which discloses all debts and assets. Form FL-160 may be filed to declare additional debts and assets as well.
In some cases, there may be separate property, which would not be divided between spouses. Separate property may include assets acquired prior to the marriage or inheritance gifts. These assets are still required to be disclosed in a divorce, however.
How Spouses Hide Assets
A divorcing spouse may hide assets in several ways such as hiding money in cash or depositing it into a secret bank account. He or she may hide purchases such as automobiles, real estate, or other expensive property that may be even easier to hide.
Business owners may also hide profits in their accounting or by failing to disclose the receipt of income. They may defer income until after the divorce so that it is not accounted for in the property declaration and division. They can also undervalue their business by overestimating taxes or business expenses.
Consequences of Hiding Assets
If it is discovered that a spouse was hiding assets, he or she may suffer significant consequences. Courts have broad discretion when it comes to penalties for hiding assets. Frequently imposed penalties include the following:
- Courts may award more property to the other spouse.
- They may impose monetary sanctions on the offending spouse.
- They may require payment of the innocent spouse’s attorneys’ fees.
- Spouses who lie about assets may be subject to criminal charges as well.
Finding Hidden Assets In Businesses
It is possible to discover assets that your spouse is hiding with skilled legal representation. Depending on the circumstances of your case, assets may be found in the legal discovery process, through forensic accounting of your spouse’s business, through title searches, and other investigative methods.
If you think your spouse is hiding assets, you need an experienced attorney to conduct an investigation. Contact the Law Office of Bruce A. Mandel at 424-250-9130 or submit our online form. We have been representing family law clients for more than 27 years, and we know how to handle cases that may involve hidden assets.
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