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Do You Have to Disclose All Your Assets in a Divorce?

Posted by Mariya Furman | Nov 02, 2022

Under California law, you must disclose all assets, income, property, and debts during divorce proceedings. This disclosure of assets process is considered a crucial step in dividing property in a divorce.

You could face civil penalties and even criminal charges if you attempt to conceal or intentionally fail to disclose assets during a divorce.

Do You Have to Disclose All Your Assets in a California Divorce?
You are legally required to disclose all assets, income, and property in a California divorce.

California is a community property state, meaning income and property acquired during a marriage will generally belong to both spouses equally. Thus, community property, also called “marital property,” is divided in half during a divorce.

There are a few exceptions to marital property, including inheritance and any property owned before marriage, considered separate property.

Further, a prenuptial or postnuptial agreement could explain how property and debts are divided in a California divorce.

The entire disclosure of all assets during divorce proceedings is a way to protect marital property and is covered under California Family Code 2100.  

This law defines the legal requirement for full disclosure of assets in a divorce case:

  • “It is the policy of the state of California to preserve and protect community assets and liabilities that exist at the date of separation to avoid dissipation of the estate before distribution, to ensure fair and sufficient child and spousal support awards, and to achieve a division of community and quasi-community assets and liabilities on the dissolution of marriage.”

In other words, both spouses are legally required to disclose all assets in which one or both could own an interest. This disclosure should be made early in the divorce process so both spouses can examine property disclosures and conduct discovery.

Further, spouses must update their asset disclosure if they find outdated information. Our California family law lawyers will look at this closer below.

What About Uncovering Hidden Assets After filing for a Divorce?

It's common for a spouse to suspect their spouse is attempting to hide assets during the divorce process. If you have valid reasons, you should provide this information to your family law lawyer, who will need to review the details.

You are legally entitled to your fair share of all the marital property. We can help you determine whether your soon-to-be-ex-spouse disclosed all the assets by collecting documentation, such as:

  • Income tax returns,
  • W-2's or 1099s,
  • Pay stubs,
  • Bank statements,
  • Savings accounts,
  • Credit card statements,
  • Vehicle registration,
  • Mortgage statements,
  • Current and past employers,
  • Retirement accounts,
  • Pension plans,
  • Investment accounts,
  • Insurance policies,
  • Business documents and partnerships,
  • Will, trusts, and estate planning,
  • Inheritances and gifts,
  • Expensive jewelry.

You should also get copies of any loan applications or financial statements. Further, any accounts created in relatives' names could be a red flag for hidden assets. You should also know the common tactic of transferring assets and property to relatives.

Perhaps your spouse is allegedly “selling” some of their assets but keeps them hidden in a storage facility. Perhaps they are lying about their finances. You need to keep track of spending habits. Creating a list of everything you and your spouse own is the first step to uncovering any hidden assets.

In situations where you may have honestly forgotten to disclose an asset, both spouses are required to immediately fix any mistakes by updating the disclosure.

What Are the Penalties for Failing to Disclose an Asset in a Divorce?

Suppose you intentionally fail to reveal an asset on your financial disclosure forms. In that case, you could face harsh consequences and even criminal charges under California Penal Code 118 PC perjury laws.

Any failure to list assets on the disclosure form will usually be considered an act of deliberately hiding assets to protect them from being divided with your ex-spouse in a divorce.

Depending on the type of asset and details, you could face civil penalties for incomplete disclosure of assets during California divorce proceedings.

In some cases, you might even face perjury charges, described as intentionally making false statements after vowing to tell the truth. If convicted under PC 118, you could face fines and jail time.

What is California Family Code 1101?

Family Code 1101 allows for the recovery of financial compensation from any spouse who was intentionally hiding assets in a divorce case.

California Family Code 1101
You may be able to recover financial compensation.

In other words, you can be held civilly liable for failing to disclose an asset which is a breach of fiduciary duty.

An FC 1101 request filed in court says that any spouse who is concealing and has failed to disclose California community property can be ordered to pay to the other spouse 50% of the value of the hidden community property, along with their lawyer fees and additional costs.

This request is made by filing a notice of motion or request for an order under Family Code Sections 721 and 1101, along with others that could apply to your case.

If the court determines that a spouse used malice, fraud, or oppression, they could order them to pay up to 100% of the value of the concealed community property.

Still, the typical solution is half the value of the undisclosed asset. Readers should note that there is a three-year statute of limitations for making such a claim.

How Can a Divorce Professional Help You?

If you retain a California family law lawyer early in the dissolution of the marriage process, they can assist you in properly completing all the forms and mandatory financial documents that include the Declaration of Disclosure, Form FL-140.

California Divorce Professional
Contact our law firm for help.

This can help you avoid mistakes that could prove costly later. Further, if the family court has reason to believe you are intentionally attempting to hide assets, you will face scrutiny and possibly unfavorable decisions by the judge.

If you have valid reasons to suspect your ex-spouse of hiding assets, a divorce lawyer can help you investigate the issue and file motions with the family court to recover financial compensation for the hidden asset and attorney fees.

Often, a California divorce involves a significant amount of documentation and financial disclosure forms. As discussed above, spouses must fully disclose all their assets, property, income, and debts during a divorce to ensure a fair property division.

Contact our law firm to review the details if you need more information or legal representation in a divorce. Furman & Zavatsky are Los Angeles family law attorneys representing people across the state. Feel free to reach us for a free case review via phone or fill out the contact form.

About the Author

Mariya Furman

Attorney Mariya Furman is licensed to practice before all of the Courts of the State of California, the United States Court of Appeals for the Ninth Circuit, and the United States District Court for the Central District of California. After receiving a Bachelor of Arts degree from Case Illinois I...

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