If you’re considering a divorce, you’ve probably already put some thought into how it will affect you financially. Perhaps you’re even toying with the idea of ferreting money away from your spouse, so you’ll have a nest egg when the divorce is final. However, this practice is not only unethical, it’s illegal. What kind of penalties can you expect if you or a spouse get caught hiding assets?
If you are thinking about filing for a divorce, or if you are already involved in a divorce, don’t hesitate in contacting an experienced and successful San Diego, CA family law attorney for a free legal consultation. Our team of attorneys at Boyd Law in San Diego, CA has extensive combined successful experience handling cases that include developing proper and strategic asset protection strategies for our clients.
The Legal Ramifications of Hiding Assets
As deplorable as it may sound, spouses hiding money from one another is more common than you might think. According to data from the National Endowment for Financial Education, about one-third of adults who combine assets say they have been deceptive about money. Men are more likely to hide assets than women are. Failing to disclose money to your spouse during a marriage is simply dishonest; try it during divorce, and the penalties could be costly.
During your divorce, you’ll be required to sign a financial affidavit. This document will outline all your joint assets, so they can be divided fairly by the courts as part of your proceeding. According to the rules of civil court, when you sign the affidavit, you’re agreeing that the document is true to the best of your knowledge. Falsely signing this document is a violation of civil law. In essence, you’re committing perjury.
So What Happens if I (or My Spouse) Lies?
Lying under oath is an act of contempt to the court. Penalties can vary not only from state to state, but also from district to district. The judge is free to decide on the penalty – some may even order incarceration. Here’s a famous example from here in California:
Eleven days before she filed for divorce, a woman won $1.3 million in the California state lottery. Thinking she could get away with it, she neglected to disclose the income in her financial affidavit. When the judge presiding over the case found out, he awarded all of the winnings to the husband!
California is a community property state, meaning that couples usually divide their property and assets cleanly down the middle in a divorce. If the woman had been honest, she still could have walked away with nearly $750,000. Instead, she left the divorce with nothing.
The Golden State also reserves the right to charge you with a criminal offense if you’re caught lying on the financial affidavit. For the penalty of perjury, you could serve up to four years of jail time.
What if I Suspect My Spouse is Hiding Money?
You may notice a few signs if your spouse is storing assets: For example, they may be withdrawing more cash from the ATM than usual. Other warning signs include large write-offs on business accounts, irregularities on your taxes, and more frequent business travel (especially if those sojourns are overseas, where they can deposit funds in an offshore account).
Unfortunately, it’s not good enough to relay a suspicion to a court; they’ll require some sort of proof. In these instances, hiring a private investigator or forensic accountant may prove beneficial. In a case in Michigan, a judge ordered that a husband found hiding assets pay for all of his wife’s private investigation fees.
If you’re facing a divorce and suspect your spouse is not disclosing all assets, you’ll need a legal advocate by your side. Trust the legal team of San Diego divorce attorneys at Boyd Law to mediate your case fairly. Considering legal counsel? Contact our office for a free initial consultation. Once you explain your unique situation, we can offer personalized recommendations and next steps.