The end of a marriage means that the parties involved will have to go through a substantial financial reorganization. Divorce can be one of the most financially complicated and difficult times for a person, and it means having to now use only one source of income to pay for all bills and only one person to shoulder household responsibilities. California is a community property state, which means that when a divorce happens, each party receives half of the marital assets. In some unfortunate circumstances, one party may choose to lie about the existence of assets in order to attempt to avoid sharing the asset with their spouse. There are severe risks and repercussions to such a choice.
When parties file for divorce, they both must exchange a financial disclosure with all assets included. This disclosure is completed under oath. If a spouse lies on this document and fails to disclose the existence or extent of an asset, that spouse could potentially later be charged with perjury or even fraud. These could carry the penalty of jail time, forfeiture of the asset, and court fees.
Another common repercussion is attorney’s fees. California Family Code section 271[CH1] provides that the court may order the party frustrating the court’s order for full disclosure to pay the other party’s attorney’s fees. Considering that divorces can go on for months or years, this could quickly add up to a hefty penalty. The court can order this be paid outright or allow it to be paid in monthly installments.
Married couples have a fiduciary duty to each other. This means that each of them owes the other a duty of fair dealing, disclosure, and honesty. If the court determines that a fiduciary duty has been breached because one party failed to disclose an asset during the divorce, the court may award the entire value of the undisclosed asset to the innocent spouse. In other words, the lying spouse ends up not only having to share the asset, but loses all of the value that he or she would have received had the asset been properly disclosed in the first place.
If you have questions about asset disclosure, let us answer them for you. Contact us today for an appointment to talk about your family law case and division of assets at 619-800-0384.