In the emotionally charged process of a divorce, it is unfortunate that sometimes one party might attempt to hide assets to skew the financial settlement in their favor. This act is not only unfair, but it is also illegal. In California, both spouses must disclose all their assets during a divorce as it is a community property state.
This article will help you understand the signs that your spouse might be hiding assets and how you can protect your interests during your divorce.
Warning signs of hidden assets
One of the first signs of hidden assets is a sudden decrease in income or an increase in expenses. If your spouse claims that they are earning less or spending more than usual, this might be an attempt to hide assets or income.
Another sign is if your spouse is overly secretive about financial matters. If they are unwilling to discuss finances, have started receiving mail from unknown banks or companies or have opened new accounts in their name only, these could be indications that they are hiding assets.
Common ways spouses hide assets
There are several ways a spouse might attempt to hide assets. They might transfer money to a separate account, purchase expensive items with the intention of undervaluing them or even give money to a friend or family member to hold until after the divorce.
Your spouse might also try to delay income or bonuses until after the divorce or use a cash-based business to hide income. They might also overstate debts or devalue assets.
Protecting your interests
If you suspect your spouse is hiding assets, it is important to gather as much financial documentation as possible. Bank statements, tax returns and pay stubs can provide valuable information about income and assets.
Additionally, hiring a forensic accountant can be beneficial. These professionals specialize in analyzing financial information and can help uncover hidden assets.
The consequences of hiding assets
In California, hiding assets during a divorce can have severe consequences. If a court finds that a spouse has hidden assets, they might require the spouse to give up their entire interest in the concealed property to the other spouse.
While it is distressing to think that a spouse might hide assets during a divorce, it is essential to be aware of the possibility. By understanding the warning signs and knowing how to protect your interests, you can ensure that you receive a fair financial settlement in your divorce.