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Uncovering hidden assets in a divorce

On Behalf of | Dec 11, 2022 | divorce

You might be among those in California who travel in high-net-worth circles. You’ve worked long and hard to get where you are today, and you want to protect your interests, especially now that you are heading for a divorce. If you don’t trust your spouse to play by the rules for full disclosure of assets and liabilities, you may want to be on your guard, in case he or she tries to hide assets to keep them from being subject to property division proceedings.  

In this state, property division operates under community property guidelines. This means that the judge overseeing your case will typically split all marital property equally between you and your ex. However, if your ex is stashing cash and being underhanded about it all, the court may not be fully aware of what assets exist.  

Where to look for hidden assets 

If you suspect that your spouse is hiding assets in your divorce, you may want to take a closer look at your recent tax returns. Many spouses overpay the IRS on their tax returns as a way to hide money. The goal would be to get that back as a refund after your divorce is final. While you’re at it, you might also want to closely review your jointly owned credit card accounts.  

Overpaying on a credit card balance is a similar trick to hiding assets through taxes. It creates a stash of money that no one knows about, including the court. Other means of hiding assets include asking a friend or relative to hold money until after the divorce, while telling everyone that the money was repayment for a loan or was a loan to the person in question. 

What can the court do about a spouse who is hiding assets? 

When you file for divorce in a California court, you must fully disclose all of your assets and debts. The same goes for your spouse. If your spouse signs a disclosure form that does not include all of his or her assets, it is, in effect, lying to the court, which is perjury. A judge can hold a person in contempt for hiding assets in a divorce.  

It is always best to thoroughly investigate a situation and to gather as much evidence as possible, if you plan to ask the court to intervene to stop a hidden asset scheme in a divorce. It is not enough to inform the court that you believe your spouse has hidden money somewhere. The judge will expect you to demonstrate evidence that substantiates your claim. It is helpful to ask a forensic financial investigator or legal advocate to assist you, so that you can build a strong case and make sure you are getting a fair settlement.