Going through a divorce can be very difficult. You may be frightened that you will lose your property or go broke after a divorce. This may cause you to lie or hide assets from your spouse. However, doing so could lead to these serious consequences.
Hiding Assets is More Common Than You May Think
California is a community property state, meaning there is an assumption that all assets acquired during the marriage are community property and each party is entitled to half. Because of this, it’s actually quite common for divorcing parties to try to maximize their separate property.
A recent study found that about 31% of U.S. adults who have combined assets with a spouse have been deceptive about money. The study further found that 58% have hid cash from their spouse, and 34% admitted they lied about finances, debt, and money earned.
The Law Requires You to Fully Disclose All Financials in Divorce Actions
California law recognizes the importance of providing a full and accurate disclosure of assets, liabilities and financial circumstances in order to ensure a proper and fair division of the community estate. Furthermore, each party has a continuing duty to immediately disclose a full and accurate update to any material changes of assets so that each party has full and complete knowledge of all assets.
You Must File a Financial Affidavit
The first step in dividing marital property is to fill out and file a financial affidavit with the court. A financial affidavit is a legal document designed to provide an accurate summary of a couple’s financial situation.
In filling out a financial affidavit, you and your spouse need to list your individual income, expenses, assets, and debts. The financial affidavit is designed to help the court determine spousal support, child support, and other property division so it is crucial that your responses to this legal document are accurate.
Ways That You May Be Hiding Your Assets
You may be hiding your assets without even realizing it. The following are very common ways some people hide their assets during divorce:
• Understating or undervaluing certain marital property;
• Overstating debts;
• Reporting lower income; or
• Reporting higher expenses.
Consequences of Not Fully Disclosing Your Assets (California Penal Code Section 118)
The financial affidavit is a legal document. When you sign the financial affidavit, you are swearing under penalty of perjury that you have disclosed all your assets to the best of your ability.
Under California Penal Code Section 118, it is illegal for you to willfully give false information when you testify in court or on a signed affidavit. If you are convicted of perjury, you could be sentenced to up to four years in jail.
Sanctions Under Family Code Section 2107(a) – If you do not fully disclose your assets or otherwise comply with the requirements of disclosure, a court may impose monetary sanctions against you. Under Family Code Section 2107(a), a judge has the power to impose sanctions in an amount sufficient to deter you from repeating the noncompliance.
Call the California Divorce Attorneys at Wallin & Klarich Today
The consequences of providing a record of financial assets that is not completely accurate are far too great to ignore. That is why it is extremely important to speak with an experienced California divorce attorney who can alleviate the burden and help you with your divorce. If you or a loved one is going through a divorce, contact Wallin & Klarich today. Our experienced divorce attorneys have been successfully representing clients in divorce cases for over 30 years.
With offices located in Los Angeles, Sherman Oaks, Torrance, Orange County, San Diego, Riverside, San Bernardino, Ventura, West Covina and Victorville, there is an experienced Wallin & Klarich divorce attorney available to help you no matter where you work or live.
Call us today at (888) 749-7428 for a free phone consultation. We will get through this together.
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