What If I Don't Disclose All the Assets In My Divorce Case (California Law)
The parties to a divorce case in California have a duty to fully disclose their assets. You may have been asked by your attorney to complete forms called a Declaration of Disclosure. It includes a Schedule of Assets and Debts on which you are supposed to list all of your assets and obligations.
This doesn't mean you have to make a list of every book, dish, CD or other item in your house. You can summarize these types of assets under a general heading, such as "furniture and furnishings."
However, what happens if you forget to list a bank account, or neglect to tell your spouse about your deferred income? What if your spouse doesn't list the asset either, and it isn't listed in your Judgment?
Division of Omitted Assets
Your spouse can go back to Court if he or she later finds out about the missing asset, and ask the Judge to divide it. But let's say the omitted asset was your deferred compensation, and you received this income from your employer after the Judgment was entered, or perhaps it's still in an account that's being held on your behalf, waiting until you're ready to withdraw it.
In this case, the "interests of justice" may require an award of 100% of the omitted community property to your spouse on the grounds that you concealed the existence and/or true value of a valuable community asset from your spouse by not listing it in your Declaration of Disclosure. You gained an unfair advantage for yourself, because you kept the deferred compensation, a community asset.
A marital dissolution case differs greatly from any other civil case, in that the parties are not standing at arm’s length. Each spouse has a fiduciary duty to the other, which continues after the date of separation and throughout the legal proceedings until the assets and debts have been divided.
A party is required to serve a declaration of disclosure on his or her spouse containing all information about assets and debts as well as their valuations. If you serve a Declaration of Disclosure, but fail to disclose the existence of certain assets, and fail to disclose all the facts regarding the value of assets that were undisputed community assets, you have violated your duty of disclosure.
You can't just assume your spouse has access to the information, and you cannot expect your spouse to ask for the information, or use formal discovery, as in other civil cases. There is no such thing as "inquiry notice" in a California family law case. You have an affirmative duty to disclose the information without any request from your spouse, formal or informal.
Consequences of intentional concealment
If you don't disclose the existence of an asset that you know about, the Court may decide to award 100% of that asset to your spouse.
Consequences of partially omitted assets
The Court even has authority to divide an asset that was partially divided by the Judgment, where a portion wasn't disclosed or divided.
What to do if you realize you failed to disclose something
Take your disclosure obligations seriously, and fully disclose ALL assets and obligations, even if you think your spouse already knows. If you later realize you missed something, disclose it right away. You can and should augment your disclosure when you get new information about the existence or value of assets.
Failure to disclose could cost you a lot more than your spouse's share of the asset you didn't let him or her know about.