In the thick of a divorce, tensions often run high. Each spouse may wish nothing but pain and misery for the other. Such feelings, though unfortunate, may be unavoidable. Even the most agreeable people can become petty and mean in the midst of divorce.
It is vital that divorcing spouses remain honest, however-regardless of how angry they have become. In fact, California law imposes a fiduciary duty on spouses to be honest with one another. It is tempting to hide an asset that one owns with a third party, or to hide income earned from a business with which the other spouse has no involvement. Do not give in to such temptation. The court requires spouses to disclose all income and assets to each other. Full disclosure is necessary for the judge to craft a fair judgment or for the parties to reach a well-informed settlement.
Furthermore, in the most severe cases, the court may impose harsh penalties against a spouse who breaches his or her fiduciary duty. If an asset has been concealed, the court will enlist the services of accountants, actuaries, and other experts in an attempt to determine the asset’s value. Armed with this knowledge, the court can take several actions. It may order that the hidden asset, originally one spouse’s separate asset, is now a joint asset, bearing the names of both spouses. Alternatively, the court may award the entire asset to the wronged spouse. The court can even compel the dishonest spouse to pay one-half of the omitted asset’s value to the other, along with his or her attorney fees.