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Is My Spouse Hiding Assets During Our Divorce?

Marital property — this is one of the most misunderstood factors in a California divorce.  California is a community property state — this means property and debt is generally equally divided between each spouse. According to the courts in California, when a couple divorces, marital property is considered equally owned by both spouses. Since each spouse or partner owns one-half of the property, they also are responsible for one half of the debt. There are complicated rules that pertain to sole owned and community property during a divorce which make it imperative for you to hire an attorney who understands California law.

Marital Property Versus Sole Property in California

There are two categories of assets and debts which a couple may have at the time of their divorce. Marital assets are those assets which are accumulated during the marriage. Marital debt is the debt accumulated during the marriage. However, there is also property and debt which may be classified as sole property and debt including:

  • Inheritances — any inheritance a person may receive while married is classified as a sole asset. This means upon the dissolution of a marriage; the property is not divisible between the two partners.
  • Property owned at time of marriage — if a person owns property at the beginning of the marriage, this property may not be included in community property. There are exceptions to this: For example if a partner owns a property or business at the time of the marriage and no additional investments in the property or business were made during the marriage from community property funds, they may remain classified as sole property. However, if there were investments during the marriage, the value of the property at the time of the marriage, less the current value may be classified as community property.
  • Proceeds from Personal Injury Cases — if one partner settles a personal injury lawsuit, the value of the lawsuit may be classified as a sole asset.
  • Property Defined in Pre or Post Nuptial Agreements — when a couple enters into a post or prenuptial agreement they often classify certain property as sole owned. This may be presented to the court as proof of one party owning the property in cases where property division is being considered.
  • Debts Which the Spouse had When Entering a Marriage — student loans, automobile loans, etc. which a spouse had prior to being married may be classified as sole debt.

You should speak with a California property division attorney during your divorce to make sure you understand the complexities involved in community property law.

Financial Disclosures During a Divorce Proceeding

Both parties will be required to submit individual financial disclosures during their divorce proceedings. These disclosures cover all assets including life insurance policies, IRA, and other retirement accounts, as well as bank and brokerage accounts. The court requires the person submitting such a disclosure to attest as to its truthfulness and completeness.

Still, there may be times when one spouse attempts to diminish the value of the assets of the marriage. There are several ways this may be done including:

  • Liquidating bank or brokerage accounts — withdrawing funds from accounts as a means of hiding the value of the account is a common tactic that is used to minimize the value of the marital estate.
  • Investing in Cryptocurrencies — today with increasing availability of cryptocurrency, one spouse may make a sudden investment in these currencies. There is no statement which is issued by the company holding this asset. This may be done in advance of considering a divorce as a means of shielding the spouse from disclosing the asset.
  • Business Investments — in advance of filing for divorce, one partner may withdraw funds from a bank account or other investment account and put the funds into a business which has been designated as sole property. This is a method used to minimize the value of the marital assets.
  • Other Investments — rare books, artwork, or other unexpected investments in antiques may be used as a way of hiding assets during a divorce proceeding.
  • Unexplained Loans — your spouse may make unexpected loans to friends and family as a method of hiding the true cash value of your marital estate.

If you suspect your spouse may be hiding assets, it is important you advise your attorney of this fact immediately. There are ways to ensure there is full disclosure including looking back at prior account balances. Always bear in mind these methods are often utilized well in advance of a divorce filing — you may stop seeing certain bank or brokerage statements, notice your spouse is getting less in bonus money or commissions, or has taken a sudden interest in unregulated investments.

Hiding Assets or Shielding is Illegal

When a couple files for divorce, each is entitled to an even division of property as well as obligated to repay debt which is part of their marital estate. Anything less than full disclosure is illegal, and the courts may hold the responsible party in contempt of court, or the offending party may face other penalties imposed by the court. You should never settle for less than the full value of your marital estate because your partner is attempting to hide assets.

When you are involved in a divorce where a significant portion of your marital estate is deemed community property, one spouse may be attempting to shield some of these assets. You need an attorney who will thoroughly investigate any claims of hidden assets to ensure you get the portion of the marital estate you are entitled to under California law. Be certain to tell your lawyer about any assets you believe may have been wrongfully liquidated or transferred to others in the months leading up to your divorce. Remember, the higher the value of your marital estate, the more likely your spouse is to attempt to shield assets.

We Can Help With High Value Divorces and Hidden Assets

To speak to us about your property division case, please call the San Diego offices of Attorney Stephen Bishop at 619-304-0418 or send us an email to arrange a free phone consultation. We can help ensure your spouse is making a full disclosure of all assets which should be part of your marital estate to make sure you get your rightful share of your marital estate.

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Discuss Your Case With An Experienced Family Law Specialist

To talk to our lawyer about your family law issue in a free telephone consultation, please call our office at 619-299-9780. You may also send us an email. We represent people throughout San Diego County in a host of different family law matters.

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The Law Offices of Steven M. Bishop, Attorney at Law, A California Corporation


591 Camino De La Reina, Suite 700

San Diego, CA 92108

Phone: 619-299-9780

Fax: 619-299-0316

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