Hidden Assets

Hidden Assets

A spouse may hide or conceal assets during a San Diego divorce case to avoid California’s community property laws. Under community property rules, assets and income acquired by either spouse during the marriage are marital property shared equally by the parties.

A few exceptions exist to the community property rules for the division of property, including inheritances, gifts, and separate property owned before the marriage. Prenuptial and postnuptial agreements can also impact property division.

California requires spouses to complete full financial disclosures during the divorce process. Parties must share information about their finances for transparency as they negotiate a property settlement agreement. Unfortunately, the requirement for full disclosure is often ignored by spouses who wish to conceal assets from their partners.

Common Ways Spouses Conceal Assets in a Divorce

Common Ways Spouses Conceal Assets in a Divorce

People often use very creative ways to hide assets during a divorce case. Knowing some of the common methods used for concealing property can give you a starting point for locating hidden assets.

Ways your spouse might try to hide assets from you include:

  • Paying phony “loans” to friends and family members who then hold the money for your spouse until after your divorce is complete
  • Overstating or creating false personal expenses and debts
  • Transferring assets and money into a trust or an account that is unknown to you
  • Hiding property and money in a business
  • Overpaying taxes and increasing tax withholdings to obtain a large refund
  • Hiding money in accounts in your children’s names
  • Creating fake business and personal debts
  • Taking small cash withdrawals from accounts over time or from numerous accounts
  • Undervaluing a business interest by paying fake employees, inflating the cost of supplies, creating fake debts, etc.
  • Transferring assets to offshore accounts
  • Purchasing property and real estate overseas
  • Deferring commissions, salary, and bonuses
  • Concealing digital assets
  • Changing the address and/or delivery method for bills, statements, and other financial records
  • Purchasing extravagant gifts for friends and family members who agree to hold the property until the divorce is final

If you are not involved in the family finances, you should begin taking an interest now. Doing so will make you aware of the income coming into the household and the assets you and your spouse own. It is more challenging for a spouse to hide assets when their partner is involved in the finances.

How Can I Find Hidden Assets During My San Diego Divorce Case?

If you suspect that your spouse may be hiding assets from you, immediately discuss your concerns with your San Diego divorce lawyer. There are things you and your attorney can do to find hidden assets, including:

Monitor Financial Accounts

It is wise to begin monitoring financial accounts at the first signs of marital problems. Make notes of suspicious withdrawals and property transfers. Pay close attention to the balances in accounts, especially if they begin to decrease a little at a time.

Review charges to credit cards and checks cleared on bank accounts. Pay particular attention to debit transactions to unknown sources. Any deviations from normal cash flow patterns should be a red flag to raise with your attorney.

Hire a Private Investigator and Other Experts

Some private investigators specialize in locating hidden assets. They have ways of tracing and locating property that may be creative and more effective. You may also want to hire a forensic accountant. They are experts in analyzing financial data and accounts to trace assets and funds.

The Discovery Process

When you file for divorce in California, disputes are litigated by the family court. Your case goes through several phases, including the discovery phase. Discovery refers to the process parties use to gather additional information and evidence to prepare for mediation or trial.

There are several tools your San Diego divorce attorney can use during discovery to gain information regarding hidden assets. 

Those tools include:

  • Interrogatories – A list of questions sent to your spouse. They must answer the questions in writing and under oath.
  • Requests to Produce – A list of documents you request from your spouse. They must submit the requested documents and explain why they cannot produce a particular request. All responses are under oath.
  • Depositions – Oral testimony taken outside of court but still under oath. Your attorney may depose your spouse and parties who may have knowledge of hidden assets.
  • Subpoenas – Court orders requiring a party to appear for testimony or produce documents they have in their possession.

Discovery is a great way to gain additional knowledge and documentation about your spouse’s finances and property. A forensic accountant and investigator could use the information to uncover hidden assets.

Contact a San Diego Divorce Attorney Today

If you are concerned about hidden assets or have questions about a divorce, you can get answers from an experienced San Diego property division attorney. The consultation is confidential, so you can be confident that your discussion with the attorney remains private.

Contact San Diego Divorce Lawyers, APC today to schedule a consultation at (619) 866-3756.