What To Do If Your Spouse Is Hiding Assets During Discovery

The discovery phase of a divorce is critical for ensuring a fair division of assets. Both spouses are legally obligated to disclose all financial information, including income, investments, and debts. Unfortunately, it is not uncommon for one spouse to attempt to hide assets to avoid sharing them during the divorce process. If you suspect your spouse is concealing assets, it’s essential to act swiftly and strategically to protect your rights. Our San Jose Divorce Attorneys at Foster Hsu, LLP are here to help you identify and address hidden assets during discovery.

Signs That Your Spouse May Be Hiding Assets

Hiding assets can take many forms, from failing to disclose accounts to undervaluing property. Common signs include:

• Unexplained Changes in Finances: Sudden decreases in income or increases in debts without clear explanations.
• Unusual Transactions: Large withdrawals, transfers to unknown accounts, or “gifts” to friends or relatives.
• Omitted or Incomplete Disclosures: Missing information about business interests, investments, or accounts.
• Secretive Behavior: Refusing to share financial documents or being evasive about financial questions.

If you notice any of these red flags, it’s crucial to take proactive steps to uncover the truth.

Steps to Take If You Suspect Asset Hiding

1. Inform Your Attorney
   The first step is to alert your divorce attorney. Experienced legal counsel can guide you through the process and implement strategies to uncover hidden assets. They can also file motions to compel disclosure if your spouse is uncooperative.
2. Request Specific Documents
   During discovery, you can request financial records such as bank statements, tax returns, pay stubs, and credit card statements. Carefully reviewing these documents can help identify discrepancies or hidden funds.
3. Use Subpoenas
   If your spouse refuses to provide the requested information, your attorney can issue subpoenas to banks, employers, and other financial institutions to obtain the necessary documents directly.
4. Hire a Forensic Accountant
   Forensic accountants specialize in uncovering hidden assets. They analyze financial records, trace transactions, and evaluate business operations to ensure all assets are accounted for. Their expertise is invaluable in high-asset divorces or cases involving complex financial arrangements.
5. Investigate Business Interests
   If your spouse owns a business, there may be opportunities to hide income or assets within the business. A forensic accountant or business valuation expert can examine the company’s records to determine its true financial state.
6. Seek Court Intervention
   If you have evidence of intentional asset hiding, your attorney can petition the court for sanctions. Courts in California take asset concealment seriously and may impose penalties, such as awarding a larger share of the marital property to the innocent spouse.

Legal Protections Against Hidden Assets

California law requires full and honest financial disclosure during divorce. Under California Family Code § 2100, both parties must provide a complete and accurate account of their assets and liabilities. Failure to do so can result in significant consequences, including contempt of court, fines, or an unfavorable property division.

Why Legal Guidance Matters

If you suspect your spouse is hiding assets during your divorce, contact Foster Hsu, LLP in San Jose today. We’ll help you navigate this challenging process and work toward obtaining an equitable outcome.