When high-asset couples decide to divorce, the spouses may face a problem that does not plague low or medium income families: the search for hidden assets. Hiding assets or, more exactly, failing to disclose assets, in a California divorce may or may not be criminal, but it is most certainly a violation of the rules that govern California divorces. If an about-to-be-divorced spouse is concerned that the other party may have hidden a significant portion of their joint assets, the person’s lawyer should be informed so that the court procedures for compelling disclosure (called “discovery”) can be invoked. The spouse should also begin a personal search for such assets.
A useful first step is to check hiding places in the house, such as file cabinets, journals, dresser drawers or even under the mattress. Such a search could reveal stock certificates, bank statements or keys to a safe deposit box. An online search of public records can also be useful. Most people do not realize how much of their financial information is available online. Just entering the name of the other spouse can reveal possible aliases, names of relatives, businesses and business associates.
Most couples share significant information about their assets, and changes in information about the assets can indicate an attempt to hide property. Bank statements should be reviewed for large, unusual transfers of money to a friend, evidence of a fake loan, “repayment” of a loan that was never made or bank accounts for the children. Business financial records can also reveal hidden assets, especially if the spouse owns a controlling interest in the business. Suspicious changes in spending habits or a one-time purchase of an expensive asset, such as an automobile, can also be clues to a pattern of hiding assets.
Also, seeking assistance from an experienced attorney or Certified Public Accountant can ensure that no assets remain hidden. Anyone worried about the other spouse’s attempt to hide assets should be aware that California imposes significant penalties on spouses who unsuccessfully attempt to hide assets.