Dividing money and property is an important part of a California divorce. Both spouses must provide full and accurate information about what they own, what they owe, and what they earn. Problems can arise when one spouse tries to hide money or property.
A Sherman Oaks divorce lawyer can help review financial records and look for property that a spouse may not have disclosed. Finding hidden assets is important because California generally treats property and income gained during the marriage as community property.
What Are Hidden Assets?
Hidden assets are money or property that one spouse tries to keep out of the divorce process. The goal may be to make it look like there is less property to divide. Hidden assets may include:
- Secret bank or investment accounts
- Cash kept outside normal accounts
- Stocks, bonds, or cryptocurrency
- Cars, boats, jewelry, artwork, or other valuable items
- Real estate
- Business income or property
A spouse may also move property into someone else’s name or transfer money to a friend or family member, planning to get it back after the divorce.
How People Try to Hide Money
People may try many ways to make money harder to find. They might open a new account, make large cash withdrawals, or buy expensive property without telling the other spouse.
Business owners may have other ways to hide income. For example, a spouse might delay collecting money owed to the business until after the divorce or claim that the business is suddenly earning much less than before.
Not every unusual financial move means someone is hiding property. However, unexplained changes may deserve a closer look.
California Requires Financial Disclosure
California spouses must disclose their finances during a divorce. They generally must disclose their income, expenses, assets, and debts.
These rules help both spouses and the court understand what property exists before dividing it. Providing false information or omitting valuable property can create serious legal problems.
California is also a community property state. In general, income and property gained during the marriage belong to both spouses, even when an account or asset is only in one spouse’s name.
What Happens When a Spouse Hides Assets in California?
Hidden property can lead to an unfair settlement if it goes undiscovered. For example, one spouse may agree to divide the known property without realizing that thousands of dollars are sitting in another account. California courts can order financial penalties, attorney’s fees, or other remedies when a spouse fails to properly disclose property or violates duties involving community assets.
Signs That Property May Be Missing
Possible warning signs of hidden assets include:
- Bank or credit card statements suddenly disappearing
- Large cash withdrawals with no clear reason
- Money moving between unfamiliar accounts
- New accounts or changed passwords
- A sudden unexplained drop in business income
- Financial records that do not match tax returns
- Delays or refusal to provide financial documents
One warning sign does not prove that property is being hidden, but it may be worth looking into more closely.
How Hidden Assets Are Found
Financial records often leave a trail. Bank statements, tax returns, credit card records, loan applications, property records, and business documents may show where money has gone.
During a divorce, spouses can also use formal discovery to request records and ask questions about finances. In more complex cases, a forensic accountant may review business books, trace transfers, and follow money through several accounts.
Finding hidden assets can change how property is divided in a California divorce. A complete financial picture helps base the division on what the couple actually owns, not just what one spouse chooses to disclose.