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Finding Hidden Income and Assets

Law Office of Karen S. Brown Feb. 2, 2022

Concerned Man Reading Divorce Form at HomeDuring a marriage, couples usually adopt a share-and-share-alike philosophy. During a divorce, however, the philosophy is more akin to “every man for himself.” Each spouse wants to protect and retain as many assets as they can.

Some spouses, in fact, will go to great lengths to keep more than they are entitled to, even hiding assets or income from the other spouse and the court. Doing so is not only unfair to the other spouse, but also illegal. Failure to disclose assets during the discovery process is perjury which is a punishable crime.

If you believe your spouse is hiding assets or income during your divorce, an experienced divorce attorney will know ways to find them that won’t put you in trouble with the law. Karen S. Brown has been helping clients throughout Los Angeles County and beyond reveal assets someone else is trying to hide.

How Are Assets Divided in California?

California is a community property state. The assets and income acquired during the marriage, as well as the debts, are considered community property, that is, the property of both spouses. That property is divided equally between the two in divorce.

Community property is not always black or white; there are some gray areas. Property owned by one spouse prior to the marriage (referred to as “separate property”) may be commingled during the marriage. For example, if one spouse bought and made mortgage payments on the house that the couple lived in after getting married, the equity in the house prior to the marriage would be separate property but the equity after the marriage would be community property.

What Assets Are Often Hidden?

It is impossible for a spouse to hide certain assets, such as the marital home or family car. Other assets are more easily hidden, such as a second home or car a spouse buys before the divorce. A spouse may also open a separate bank account and begin depositing money into it, intending to hide its existence from the spouse during the divorce. Or, a spouse could open a separate retirement account or give money to a friend or family member to “hold” until the divorce is final.

In some marriages, one spouse takes care of the finances. They pay the bills and mortgage, deposit money into savings, investments, and retirement plans, and provide a designated sum for the household needs such as groceries, clothing allowances, and other items. The sneaky spouse could tell the other spouse that their pay or benefits were cut or the business they own is losing money. That would allow them the opportunity to reduce the household expenditures and pocket the difference. It can be easy for the spouse handling the finances to tuck away assets without the other spouse knowing about it.

How Can They Be Uncovered?

If you suspect your spouse is hiding income or assets, you should discuss it with your attorney first. Your attorney will know where to look and how to find them. Just as hiding assets is illegal, so is uncovering them using the wrong methods, for example, committing fraud to gain access to a retirement account or searching your spouse’s briefcase for a copy of their pay stub.

There are many ways to find anomalies in places you have a legal right to access. For example, you can compare the financial disclosure information your spouse must provide in divorce with the bank and retirement accounts you have access to. You can check public records, such as those of the county assessor, to see if any property is listed under your spouse’s name other than the property you know of. A forensic accountant may be able to find discrepancies in your financial records over time. It will be your attorney who can guide you through methods of legal access and help you avoid doing anything illegal.

Your attorney can also use the process known as “discovery” to obtain documents you otherwise cannot legally access, such as those pay records. Your attorney can file discovery requests with the court, including interrogatories and requests for the production of documents. Barring the court’s sustaining of any objections to the requested information, the court can compel your spouse to produce the responses and documents requested. Upon submission of that information to you and your attorney, your spouse also attests to the accuracy and completeness of the information. If it is determined that was not true, your spouse can be charged with committing perjury.

Working With a Certified
Legal Specialist in Family Law

The equal division of assets is a tenet of California law, and division can only be equal if all community property is accounted for. There is no need to attempt to unearth hidden marital income and assets without the help of an experienced family law attorney who advocates solely for your best interests.

There is a reason that Karen S. Brown’s standing as a Certified Legal Specialist in Family Law sets her apart from a crowded field of family law attorneys. She puts the extra training and expertise required to obtain that certification to work for her clients in Los Angeles County, Ventura County, Orange County, San Bernardino County, Beverly Hills, Encino, Studio City, Hancock Park, Santa Monica, South Bay, Pacific Palisades, Brentwood, Santa Monica, Torrance, and Long Beach, California.

Call the Law Office of Karen S. Brown today to schedule a consultation.