I am going through a divorce. Do I have to disclose all the worldly assets I have? In other words, do I have to disclose the old watch I got from my Grandfather?
The underlying concern and objective is always the same: one party feels the asset belongs to him or her and therefore, he or she should not have to disclose it. Or it is pure greed and the party decides that she or he would like to keep it.
In all divorce cases in California, each party has the legal obligation to disclose. Disclose literally means to share information on income and expense as well as assets and liabilities of the parties.
Jeff Landers recently wrote in the Forbes that “women are surprised to learn how commonplace it is for husbands to hide assets from their wives.” He states that typically they tend to hide or understate marital property; overstate debts; report lower than actual income and higher than actual expenses. In a divorce, each party should be fully informed of the other’s financial affairs so as to be able to make decisions about dividing up the assets and liabilities and also to determine resolution on other issues (such as support).
Here are a few points to consider:
• Duty to Disclose. The duty to disclose is not optional. The parties are required by the law to make disclosures on prescribed forms twice.
• Full Disclosure. Disclosure has to be complete and supporting documentation needs to be provided. For example, if you have a bank account, you have to not only provide information on the bank, account number, dollar amount and when you acquired the account, you also have to provide an account statement with it.
• Community or Separate? In the disclosure forms you can assert a right and claim that a given asset is yours or a certain liability belongs to your spouse. Of course, you have to be able to prove it as well. Mere assertion of such a right does not make it so.
For example, if you have your grandfather’s watch, it was probably a gift to you and hence it belongs to you alone but you must disclose it on the legal forms.
• Penalty of Failure to Disclose. Failure to disclose a certain asset, can result in penalties. Penalties vary from state to state and from case to case to but in general, the law empowers the courts to exact some form of punishment for this blatant contempt of court. Perjury in legal proceedings, could also expose you to jail time, and your spouse can end up owning the entire asset 100%.
So, if you are in doubt, Disclose!
Madan Ahluwalia is a California attorney located in California. Visit him at www.ahluwalia-law.com