When you divorce in California, you need to work out what is separate property and what is community property. Separate property you each keep, community property you must divide.
When totaling the assets you and your spouse own, you may feel something is missing. If so, it could mean your spouse has hidden assets.
Your spouse can hide asset in California or outside the state
There are several ways in which people may try to hide assets in a divorce. Here are some:
- They moved assets out of their name:Your spouse could put assets into the name of friends, family or businesses. For example, they could buy a second home but register it in the name of their sister. Once the divorce is through, the sister would transfer it back to them, cutting you out of your entitlement unless you discover it first.
- They moved the assets out of the country:Offshore trusts are a popular way of keeping money out of the reach of the tax authorities. If you only look for investments within your state, you may miss significant assets held offshore.
- They moved the assets into a domestic asset protection trust (DAPT): California does not recognize DAPTs,but your spouse could set one up in another state. Some states use DAPTs to encourage people to move their money from another state. People can use them to cut people out of trusts in their own state, without their knowledge. It can be challenging to find out information about these secretive trusts.
You may need to hire a forensic accountant to track down hidden assets. Your attorney can help you assess the situation. They can help you fight for your fair share when dividing property in a divorce. If your spouse tried to hide assets, the judge might award you a greater share of the community property.