Removing marital property before divorce – some people might wonder if is it a good idea. We will give to you some inside about the consequences of such an attempt.
If you are planning for a divorce, you are worried about how your property will be divided. If you have a significant amount of assets or cash, you might be thinking to try removing marital property before the divorce. It is especially common when you believe you worked hard for this property and your spouse does not deserve it. It is a bad idea to remove marital property before the divorce or during divorce
Removing marital property before divorce – trying to avoid 50-50 split of Community property
The main reason people have temptation to remove marital property before divorce is because the law requires a split of marital if couple divorcing. Different states have different rules for property division.
California is a community property jurisdiction and all property acquired during the marriage, accept of the property acquired by gift and inheritance is community property and should be divided 50-50% between the spouses. However, you should keep in mind that the property you have acquired property before marriage and you have not commingled it with the community property, it is your separate property and you do not have to worried about dividing it in your divorce.
Removing marital property before divorce – huge risk and easy to be caught during discovery
Discovery is the process where the spouses seek information from one another as well as and third parties such as 401K plan administrators, . California Civil Code section 2017.010 regulates the discovery process.
A party may obtain discovery regarding anything relevant to the matters unless it is privileged. There are many discovery tools that might be used in family law matters to get the information necessary for use as evidence at trial. There are many forms of discovery and the best source to look for discovery is the Superior Court of California website Discovery overview
Removing marital property before a divorce would be heavily targeted during the discovery by deposition and other forms of discovery. If you are not telling the truth under oath about your property and assets, it constitutes a crime of perjury.
Removing marital property before divorce and declaration of disclosure
Under Family Code §2103 , during a divorce, spouses are required to provide information to each other regarding their income, expenses, assets, and debts. It calls financial disclosure. There are preliminary and final declarations of disclosure. The preliminary declaration of disclosure is mandatory and must be done by both spouses.
Under Family Code Section 2104(a): Except by court order for good cause, as provided in Section 2107,  in the time period set forth in subdivision (f), each party shall serve on the other party a preliminary declaration of disclosure, executed under penalty of perjury on a form prescribed by the Judicial Council. The commission of perjury on the preliminary declaration of the disclosure may be grounds for setting aside the judgment, or any part or parts thereof, pursuant to Chapter 10 (commencing with Section 2120), in addition to any and all other remedies, civil or criminal, that otherwise are available under law for the commission of perjury. The preliminary declaration of disclosure shall include all tax returns by the declarant within the two years prior to the date that the party served the declaration.
Under family Code Section 2104(1): “The identity of all assets in which the declarant has or may have an interest and all liabilities for which the declarant is or may be liable, regardless of the characterization of the asset or liability as community, quasi-community, or separate”
If one of the parties intentionally or knowingly does not disclose any assets in his declaration, the judgment would be set aside and the other party might be awarded 100% of the assets that his/her spouse was trying to hide. So the consequences of removing marital property before divorce in an attempt to avoid sharing that property 50-50% might be losing everything instead of half of this property.
Removing marital property before divorce – breaching fiduciary duties between spouses
A husband and wife are subject to the general rules governing fiduciary relationships which control the actions of persons occupying confidential relations with each other. This confidential relationship imposes a duty of the highest good faith and fair dealing on each spouse, and neither shall take any unfair advantage of the other. This confidential relationship is a fiduciary relationship subject to the same rights and duties of nonmarital business partners.
IN an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or m malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant….(c) As used in this section, the following definitions apply: (1) “Malice” means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with the willful and conscious disregard of the rights or safety of others. (2) “Oppression” means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights. (3) “Fraud” means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.
Family Code Section 2556: In a proceeding for dissolution of marriage, for nullity of marriage, or for the legal separation of the parties, the court has continuing jurisdiction to award community estate assets or community estate liabilities to the parties that have not been previously adjudicated by a judgment in the proceeding. A party may file a postjudgment motion or order to show cause in the proceeding in order to obtain adjudication of any community estate asset or liability omitted or not adjudicated by the judgment. In these cases, the court shall equally divide the omitted or unadjudicated community estate asset or liability, unless the court finds upon good cause shown that the interests of justice require an unequal division of the asset or liability.
In case the Petitioner or Respondent violates his/her fiduciary duty to disclose any asset in an effort to retain the community asset as his property, the court can award to another spouse 100% of the omitted assets under the case In re Marriage of Rossi.
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