California is a community property state when it comes to dividing marital assets, property, and debts in a divorce. This means that your spouse will basically get 50 percent of everything that is included under the label of marital property. Marital property is everything you and your spouse have acquired from the date of marriage until the date of separation, from all earned income to the family home, vehicles, personal belongings, investments, pensions, retirement accounts, and more. As a general rule, all property acquired via an inheritance, gift, or bequest (even if during the marriage) is separate property of the recipient.
For some people, that may be a bitter pill to swallow, leading them to try and hide money or assets long before their divorce is even filed so that the other party doesn’t find out. This has been labeled “financial infidelity” and not something you should engage in, no matter how unjust losing half of your wealth may seem. Unfortunately, divorce can be a very contentious matter that involves highly-charged emotions ranging from anger to revenge driving some people to take underhanded actions. If you believe you may be the victim of hidden assets in a San Diego divorce, we highly recommend that you contact Cage & Miles,LLP for experienced legal help.
Reach out to a divorce lawyer at our firm at (858) 943-2060 to discuss your legal issue in a free consultation.
Where Did the Money (or the Asset) Go?
There are various ways a spouse can hide money from you and then fail to disclose its existence or whereabouts when filing for divorce.
Below are various scenarios that an individual could engage in to do so.
Withdraw cash from your bank accounts and stash it in a safety deposit held in his or her name only
Slowly drain money out of an account and set it up in an online bank account in his or her name only
Spend money on lavish gifts for people you don’t know or for himself or herself that are then stashed in the safe deposit box, a locker, or elsewhere
Set up offshore bank accounts where money is deposited that was earned or obtained without your knowledge
Set up a separate bank account in the name of one of your children that you don’t know about
Make fake loans to friends or family who then hold the cash to be returned after the divorce
Undervaluing an asset or understating one’s income when required to disclose it
Inflating expenses on a personal or family business
Scheduling commissions, bonuses, or other income to arrive once a divorce is over
Paying an excessive amount on tax bills which can then be recovered by asking for a refund once the divorce has been finalized
These are just examples of how a spouse can cheat. Unfortunately, if you have never tracked the finances while married, you may have little awareness of such matters. If you have been following along with the finances of your marriage, you should stay extra alert when divorce seems imminent and you and your spouse’s trust are at an all-time low. If your relationship becomes adversarial, you may be a candidate for financial infidelity.
What Can be Done to Uncover the Truth?
The use of forensic accountants and discovery can be used to evaluate your community finances and to investigate where money or assets may have been siphoned off. That is the expertise a good financial investigator can bring to the matter. If money has been hidden from you and not disclosed in your divorce, the penalties in family court are steep. In cases of an undisclosed asset, the innocent spouse could be awarded 100% of the asset. In addition, in these cases, the court may also order financial penalties and other sanctions.
No matter where you are at in your divorce, having trusted legal counsel is imperative if you wish to ensure that your legal, financial, and parental rights are held secure. At Cage & Miles, LLP, you can count on our level of commitment, our vast knowledge of family law, and the skills we have developed over the years to help you win the best possible case outcome.