Los Angeles Divorce Checklist : A Checklist of Hidden Assets Your Spouse Has
Some important aspects of California divorce law that you need to be familiar with as you enter into divorce proceedings are the related concepts of “community property” and “equitable division.” The concept of community property says that property and/or income acquired by either party during the marriage generally belongs to the marital community (meaning both partners), regardless of whether one spouse earned it all through his or her efforts. Equitable division says that such community property should be divided equally among the divorcing partners. What this means is that one spouse might be selfishly motivated to hide assets from the other spouse during the divorce process so that he or she does not have to potentially share the assets with the other. Hiding assets is unfair and illegal under California law, but oftentimes it is up to the other spouse (with the help of a divorce attorney who can enlist the aid of a private investigator) to seek out these hidden assets, and bring them to the attention of the court. Here is a “divorce checklist” of common hidden assets a spouse might try and unfairly withhold:
Separate Checking/Savings/IRA Accounts
Even if your spouse has a checking or savings accounts (or any kind of financial account for that matter) under his or her own name, funded by income he or she earned, that account still qualifies as community property and subject to equitable division. Such an account may have been opened with your knowledge or secretly. Look for transfers from shared accounts or lower than usual deposits into shared accounts as a sign there might be a hidden individual account.
“Gifts” or “Loans” Made to Friends and Family
A common way to hide assets is to make what appears to be a gift or loan to a trusted friend or family member which the offending spouse then will retrieve from that person following the divorce proceedings. A spouse might even think that this is legal, but it is not. And even if the transfer of assets was legitimately a gift, if it was done without your approval, then a court may likely determine that it was an improper transfer of community property and order it returned to the marital estate.
High Value Purchases (Art, Clothing, Recreational Items, etc.)
A spouse on the verge of or in the process of divorce might go on a shopping spree, either for emotional reasons or to attempt to get rid of assets that would be subject to a family court’s jurisdiction. Art is a classic example of this, as a $10,000 painting is seemingly easy to physically hide and difficult to valuate (e.g. a spouse might claim it is worth $50 as opposed to $10,000). If such purchases were made with money earned during the marriage, they are community property subject to equitable division.
Deferred Compensation and Bonuses
Generally, a court will look to the date that the parties no longer decided to be married as the cutoff date for income that is subject to equitable division. But it is important to remember that all money earned rather than received as of that date is included in the marital estate. So if your spouse gets paid a yearly commission or bonus in January for the previous year, but you separated on June 30, you would be entitled to roughly half of that commission, bonus, or deferred compensation even though it wasn’t paid for months.
Assets Kept at the Workplace
A person’s office is often their home away from home, and one that is kept private from the other spouse. A common evasive tactic is for a spouse to hide assets at their office or workplace, whether in the form of personal assets or business assets (i.e. increased inventory in a family business), but such assets may well be marital property subject to equitable division.
Keeping one’s assets in cash is the timeless way for people to evade detection through financial records, but such cash is nevertheless subject to equitable division if earned during the marriage. Look for large and/or consisted withdrawals from shared or individual accounts, or smaller than normal deposits into accounts.
If You Need Assistance With A Divorce
If you suspect your spouse is hiding assets, either intentionally or unintentionally (indeed, many spouses think they are perfectly in the right doing any of the above practices), contact a skilled divorce attorney who can help you find hidden assets and bring them to the attention of a court. The Gastelum Law Firm has years of experience in obtaining fair and just divorce decrees in California, and will work to make sure you are treated fairly as you go through the divorce process. Contact Gastelum Law Firm today for a free consultation.