What Are the Legal Implications of Hidden Assets in an Orange County Divorce?

Hidden Assets in Divorce May Be More Common Than You Think

No one marries someone they don’t believe they can trust. Unfortunately, sometimes this trust is misplaced — and this can become very apparent during a divorce. After all, nearly two-thirds of individuals have admitted to lying to their partners about finances. So, what are the legal implications of hidden assets in an Orange County divorce?

As it turns out, there are many. Not only could lying about assets result in a negative outcome for the person lying, but they may even find themselves on the wrong side of criminal law. Of course, such implications only exist if this dishonesty is discovered. Otherwise, it’s the other spouse who could face negative outcomes when their former partner lies about assets.

When you’re going through a divorce, it’s critical to understand all these potential consequences.

Violations of California’s Disclosure Laws

Perhaps the most obvious legal implication of hidden assets in an Orange County divorce is the violation of California’s disclosure laws. Statutory requirements state that both spouses must fully disclose all assets, debts, and sources of income when they’re going through a divorce.

This law is incredibly strict since California handles asset division under the community property rule — meaning each spouse gets 50% of everything. Violating this law can result in severe penalties during the divorce.

The party hiding assets may face fines, uneven division of assets, and potentially even have the entire hidden asset granted to the other spouse. If you suspect your former partner is hiding something, your attorney may be able to secure a better-than-expected outcome on your behalf.

Effects on Spousal Support Awards

Alimony is a common outcome in California divorces. This is particularly true when there’s a significant discrepancy between the individual income and assets of the parties involved. When one of the spouses hides assets, the calculations to determine spousal support will not be accurate.

If this deception is discovered, the courts will adjust these payments in order to reflect the actual financial situation. Whether this benefits the paying or recipient spouse will depend on who was discovered hiding assets during the divorce.

Legal Fees and Costs Awarded to the Innocent Spouse

If undiscovered, the implications of hidden assets in an Orange County divorce favor the offending spouse. Their concealment of money and properties may result in a better financial situation for them — all because an imbalance and unfair divorce order was entered. However, such fraud can become very costly once discovered.

That’s because the courts may order the offending spouse to pay their former partner’s legal fees and costs. The dishonest party may not be on the hook for all legal fees, but they’ll likely have to pay for the resources exhausted to discover their deception. This could include the services of forensic accountants, attorneys, and other asset-discovery professionals.

Possible Criminal Charges

To the spouse who attempts to hide assets, the entire situation may seem like a game of cat and mouse. They treat it as if it’s a contest to see if they can keep more than they’re entitled to. However, this act is anything but a game. In fact, someone who hides assets during a divorce could very well face criminal charges.

To hide assets during a divorce, the offending spouse has to either falsify information on legal affidavits or lie under oath while giving depositions. Both these acts could fall under California’s fraud and perjury statutes. If you’re divorcing a narcissist, you may not be surprised that they’re concealing finances.

However, they might just be surprised when they realize their actions could warrant a criminal investigation. It’s worth noting that criminal charges are rarely pursued for issues that arise during divorce, but they are possible. This possibility might just be enough to make the offending spouse cease their fraudulent actions and give you a better bargaining position.

Potential Reopening of the Case

Order modifications are relatively common after a divorce, but they’re usually in relation to child support, child custody, and alimony payments. Property division orders are usually set in stone, but this is not the case if assets are fraudulently hidden. California law allows divorce cases to be reopened if hidden assets are discovered after the fact.

This is an important legal implication for victims of hidden assets. After all, your former partner’s actions could result in unfair property division, reduced spousal and child support, and even lost retirement and investment savings. Put simply, this act equates to a financial assault against you — so it’s critical for you to understand how to handle such issues.

What to Do if You Expect Hidden Assets in Your Orange County Divorce

If you suspect that your former partner is acting in bad faith during your divorce by hiding assets, it’s important to take immediate action. Failure to do so could result in an unfair divorce decree, and when property is divided based on incomplete information, the consequences for you can last a lifetime. At this point, your goal becomes proving the deception.

There are many ways to do this, but you may be best served by hiring an Orange County divorce attorney. These legal professionals typically have existing relationships with professionals who can help — such as forensic accountants and document examiners. Your attorney can also request specific financial documents during discovery, and their experience means they’ll know what discrepancies to look for.

There are clearly major implications for hidden assets in Orange County divorces, but a dedicated divorce attorney can work to ensure a fair outcome. At The Bledsoe Firm, our family law lawyers will work to make sure you’re not taken advantage of. Contact us at 949-889-1227 to schedule a confidential consultation.