A divorce in California can have many financial repercussions. Due to the state’s community property law, which dictates a 50/50 split of all marital assets if a divorce case goes to court, individuals may be even more inclined to protect their assets. Hiding assets and concealing them from a spouse during a divorce, however, is not the answer.
What Is the Financial Disclosure Requirement in a California Divorce Case?
When a divorce or legal separation occurs, both parties involved in the case must gather, disclose and share their financial information with each other. The person who initiated the divorce must disclose this information within 60 days of filing the Petition for Dissolution. The Respondent must within 60 days of filing a Response.
The following types of information must be disclosed to meet California’s legal requirement:
- Tax returns
- Proof of income
- Bank account statements
- Debt-related documents
- Credit card statements
- Retirement account statements
- Mortgage statements
- Asset titles
Both parties should make copies of all of their financial documents before sending them to their spouse. Copies should be mailed by someone other than the spouse. They should not be delivered to the courthouse. Afterward, to show the courts that the requirement has been met, each person should fill out Form FL-141 and send it to the court clerk.
Penalties and Legal Consequences for Knowingly Hiding Assets
During a divorce case in California, you must disclose all of your assets or else face potential penalties. Even if you unintentionally fail to disclose an asset, this can have legal consequences. You are responsible for making a complete and detailed inventory of all of your income and assets.
Intentionally or carelessly hiding assets during your divorce can lead to penalties such as:
- Being held in contempt of court
- Forfeiting the hidden asset as punishment
- Facing criminal charges for perjury (providing false information under oath) or fraud
- Having to pay for the other spouse’s legal fees
- Losing credibility in court
Full financial disclosure is imperative so that assets can be properly divided in a divorce case. Missing an asset could signal to the courts that you are attempting to hide your assets to protect them from being shared with your ex-spouse. If you realize that you failed to disclose an asset, remedy the problem as quickly as possible. Amend your financial disclosure forms to add the forgotten item and avoid penalties.
How an Attorney Can Help You Protect Your Assets
Although it is normal to want to protect your assets, attempts to hide them can be fraught with issues and legal penalties. Courts and lawyers often use forensic accountants to find hidden assets, leading to penalties for the individual.
If you wish to protect your hard-earned assets lawfully during a Los Angeles divorce case, turn to an experienced divorce attorney in LA for assistance. An attorney will explore creative asset protection solutions that aim to preserve your legacy as much as possible without breaking the law.
Smart solutions may include prenuptial or postnuptial agreements, correctly classifying your assets, keeping property separate from marital property, protecting your business interests with special contracts, and your lawyer taking over settlement negotiations for you to advocate for your desired outcome.
To discuss legal safeguards for your assets prior to a divorce in Los Angeles, contact Boyd Law for a consultation.
