High Net Worth Divorces: What If My Spouse is Hiding Assets?

Getting a divorce in California becomes more complex when you’re a high net worth couple. With a large variety of assets likely making up your marital property, it can be difficult to identify precisely how much you might be entitled to after the divorce. This can be especially true when your spouse is the high earner or wealthier spouse – they may be inclined to hide assets from you so that they can hang on to a larger portion of the pie. If you’re finding yourself in this situation, our Irvine high asset divorce attorneys can help.

How to Determine If Your Spouse is Hiding Assets

When you initiate a divorce proceeding, it’s important to begin gathering all of the important paperwork immediately to have a clear sense of your total asset value. This will help you when it comes time to file a financial disclosure report and help your attorneys determine where assets may be missing or otherwise unaccounted for. Some of the paperwork you will be asked to gather will include pay stubs, a list of all assets and liabilities, including mortgages or other debt, all income and cash flow sources, employment history for both you and your spouse, prior tax returns, property records, credit card statements, loan applications, and appraisals of art, jewelry or antiquities.

By doing your own accounting of your total worth, you help your attorneys identify whether your spouse might be hiding assets from you. If your lists are different, it’s a sure sign that something funny is going on. Also, there are other types of behavior that suggest your spouse may be trying to hide assets from you. These include:

• Changes in spending: Is your spouse suddenly spending more? Or even less? They may be paying less towards shared bills that could adversely affect you. 
• Changes in the address where they receive bills: If your spouse is rerouting the destination where they are meant to receive their bills, they might be trying to avoid them and paint a picture of a person who is struggling financially.
• Slow drains: If your account funds are slowly diminishing and not being replenished, it likely means that your spouse is trying to slowly move money into another undisclosed account so that you can be entitled to less. 

Utilize the Experience of Your Irvine High Asset Divorce Attorneys

When it comes to handling high net worth divorces, our attorneys have seen it all. They are certainly used to seeing high net worth spouses with less-than-stellar morals decide to try and cheat their former spouses out of what they deserve. The key to avoiding becoming a cautionary tale in a high net worth divorce is to stay on top of how your finances are being managed. Don’t let your guard down and assume your ex will do the right thing for you.

Ready to get started? Contact our Irvine high asset divorce attorneys today.

Frequently Asked Questions

What are the signs a spouse may be concealing assets?

Patterns rather than single events. Unexplained transfers out of joint accounts, a sudden drop in reported business income without a corresponding change in lifestyle, new entities or accounts appearing on a tax return that were never discussed, loans to friends or relatives that were never repaid, cash-intensive business activity that does not reconcile to deposits, and disclosure schedules that list assets without values or omit documents. Resistance to producing records is itself informative, because the disclosure obligation is affirmative and a spouse with nothing to hide has no reason to fight it.

How are hidden assets actually located?

Through documents, methodically. The reliable method is to obtain several years of bank, brokerage, and credit card records and reconcile money in against money out, then follow every unexplained transfer to its destination. Tax returns and their schedules frequently disclose entities and accounts that appeared nowhere in the disclosures. Loan applications are useful because they were prepared to show the largest possible net worth. Where a business is involved, its general ledger reveals more than its balance sheet. Subpoenas to financial institutions and third parties supply what a party will not.

What are the consequences if a spouse is caught hiding assets?

Substantial, and they survive judgment. Spouses owe each other a fiduciary duty in managing community property, and breaching it exposes the concealing spouse to an award of the other spouse’s share of the undisclosed asset, and where the conduct involves fraud or malice can support awarding the entire asset to the wronged spouse. Attorney fees and sanctions are available, and a judgment obtained through nondisclosure can be set aside. In practice, concealment usually costs more than the asset was worth.

Is it too late if the divorce is already final?

Often not. California permits a judgment to be set aside where it was obtained through a spouse’s failure to disclose, and the duty to disclose does not expire at judgment. There are time limits, and they depend on the ground asserted, so the discovery of a concealed asset should be acted on promptly rather than investigated at leisure. What matters most is documenting when and how the asset came to light, because that timing frequently determines which ground and which deadline apply.