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Hiding assets in a California divorce can be risky

California law requires both parties to a divorce to make a full and complete disclosure of their assets to the other party. Occasionally, one or both parties will attempt to prevent the other spouse from learning about certain assets with the intent of preventing the court from making an equal property division as required by California law. Those who attempt this gambit often fail, and they may face very serious penalties.

The California Family Code specifically addresses this situation by providing that the court has continuing jurisdiction to divide or award assets that were not included in the original proceeding. The practical impact of this law is that an ex-spouse who learns that the former spouse has concealed assets or willfully misrepresented the value of the assets can bring a motion before the court to divide the assets. The law contains a very serious penalty if the court finds that the concealment or misrepresentation was intentional.

The court shall divide any such asset equally unless it finds that the interests of justice require an unequal division of the property. In other words, the court has authority to impose a penalty on the party who tried to hide assets. The penalty may include awarding the entire asset to the other spouse. For example, one spouse who owns a small corporation may have compiled a large amount of money in a retirement plan. If that spouse attempts to conceal the existence of the plan from the other spouse, the court may award 100% of the value of the plan to the other spouse.

No one should ever give in to the temptation to conceal assets in a divorce. It may happen, however, that a trusting spouse discovers, after the divorce, that the ex-spouse has succumbed to temptation and hidden assets. In such cases, the assistance of an experienced divorce lawyer may be essential in persuading the court to make a proper division of the hidden assets and to impose a proper penalty.

Source: FindLaw, "California Code, Family Code - FAM ยง2556," accessed on Feb. 12, 2018

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