Feeling an impulse to hold back financial information during a divorce is valid. You may see this as protecting yourself, but acting on that impulse can put you in jeopardy.
In California, avoiding full financial disclosure in a divorce carries severe consequences. Understanding the importance of transparency in property division is vital to a fair resolution.
Complying with California’s family law
From the moment the divorce process begins, you and your spouse have a fiduciary duty. Both parties must treat each other with honesty about their finances.
The courts highly value fairness in divorces and frown upon spouses who secretly spend, hide or damage their community assets. To ensure a just and equitable distribution, the courts require you and your spouse to provide an accurate picture of your income, expenses, assets and liabilities.
Facing severe penalties for hiding assets
Full financial disclosure is mandatory. If you or your spouse fails to disclose an asset or misrepresents its value, it constitutes a violation of fiduciary duty. This results in severe penalties, including:
- The non-disclosing party faces monetary sanctions.
- The injured party receives 100% of the hidden asset.
- The non-disclosing party pays all of the injured party’s attorney’s fees.
Being honest from the start can help you avoid these consequences.
Divorcing with transparency
Property division can be one of the most stressful parts of divorce. Choose transparency to avoid delays and complications that lead to costly legal fees.
If you are unsure how to proceed, seek advice about full financial disclosure. This valuable step can prevent errors and ensure your financial declarations are accurate.