Understanding the Full Disclosure of Assets in a Divorce
A full disclosure of assets (and debts) is a requirement in every divorce. In order for the court to fairly distribute assets and debts among the divorcing parties, it must first know all of the assets and debts each party has. While some people attempt to hide their assets in an effort to secure their financial future after the divorce, this is illegal and can cause much more trouble than it’s worth. Here’s what you should understand about the full disclosure of assets in a divorce.
What You Shouldn’t Do
When you’re making a full disclosure of your assets and debts for the purpose of a divorce, it’s critical that you don’t:
- “Round up” too much when reporting expenses. While you need to have some leeway when it comes to fluctuating utility bills, if you overestimate your expenses too much, you could be accused of false reporting.
- Hide or undervalue your assets. Hiding assets takes many forms, such as transferring an asset to a family member or friend right before the divorce so you don’t “technically” own the asset. Undervaluing an asset is simply stating that it is worth much less than it actually is.
- “Round down” when reporting your income. If your income is fixed, accurate reporting isn’t too difficult. If you’re self-employed or your income varies, you have to be a little flexible when reporting. However, if you report much less than you actually make, you could be in trouble.
- Claim that you owe more debt than you do. It’s important that you provide financial documents for not only debts that you share with your ex-spouse, but also debts that you owe yourself.
What Happens If You Do
If you do decide to attempt to hide assets and you are caught, the penalties can be stiff. In some cases, the offending spouse is simply ordered to pay their ex-spouse’s attorney’s fees and court costs. However, in other cases, all assets could be awarded to the spouse who didn’t attempt to hide assets, or the offending spouse could be incarcerated on charges of contempt. Regardless of the penalty, it’s not something you want to deal with during this already difficult time.
Contact a Huntington Beach Divorce Lawyer Today
When divorce seems like the only option left, it’s important that you have someone on your side advocating for your best interests and guiding you through complex issues like disclosing assets and debts. Contact the Law Office of Barbara E. McNamara today by calling 714-740-2542.
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