Arizona is a community property state. Spouses share equal rights to marital income, real property, and financial information. Community property laws apply to all property acquired by either spouse during the marriage, with the exception of designated separate property of the spouses.
Marital assets may include, but are not limited to:
- The marital home;
- Vacation property;
- Any business or professional practice;
- Investments;
- Savings;
- Bank accounts;
- Pension plans;
- Life insurance;
- Retirement accounts; and
- Stocks or other investments.
One or both spouses may begin hiding marital assets in anticipation of a divorce or when a divorce is filed. However, doing so is illegal and opens that spouse up to family court penalties and more.
Concealing Marital Assets is Illegal
At the beginning of every divorce, spouses must disclose all of their assets, including monthly income, debt, and expenses. Each does so by signing legal documents under oath, subject to penalties for perjury (lying).
When the Petitioner, the spouse filing for divorce, files their Petition for Dissolution of Marriage with the court, they must list all of their assets with an approximate value. This document is served on the Respondent spouse, along with a Preliminary Injunction.
A Preliminary Injunction is a court order prohibiting the following conduct by either spouse:
- Concealing earnings or community property from the other spouse;
- Taking a loan against community property; and
- Selling, transferring, mortgaging, or disposing of community property.
Violating the Preliminary Injunction can result in charges of contempt of court, fines, and even jail time.
The Respondent, like the Petitioner, is required to disclose all of their assets with an approximate value upon filing their Response to the Petition for Dissolution of Marriage.
The Consequences of Lying Under Oath
Violating asset disclosure laws in a divorce is a serious offense. Not only could an offender end up paying for their spouse’s attorney fees, but they could also be fined and serve jail time.
Other penalties could include:
- Losing a portion of their share of the community property to the other spouse;
- Losing all of their share of the community property to the other spouse; and
- Losing any credibility with the court.
It is best to be honest and up-front about income and assets rather than lose any claim to half of the community property in a divorce.
Uncovering Hidden Assets in a Divorce
During a divorce, subpoenas are helpful in uncovering a spouse’s hidden assets. People and records can be subpoenaed as evidence in a case.
Outside of court, private means may be used, such as a forensic accountant. These financial experts specialize in tracing funds to their source and accounting for income and expenses.
A spouse may hire a private investigator to find out if their partner uses multiple banks, investment firms, or visits an unknown post office box to collect mail.
Speak with an Experienced Arizona Divorce Attorney
If you think your spouse is hiding assets in preparation for a divorce, contact an experienced Chandler divorce attorney immediately. At Wilson-Goodman Law Group, PLLC, we can start legal proceedings to hold your spouse accountable for asset concealment.
At Wilson-Goodman Law Group, PLLC, has relationships with forensic experts and other professionals to help ensure your divorce settlement is fair and equitable. If you discover hidden assets after your divorce, our skilled attorneys can assist you with those proceedings as well.
Reach out to Wilson-Goodman Law Group, PLLC, now to learn more about asset concealment in Arizona and how an attempt to deceive the court can impact you.
FAQs
A spouse who attempts to undermine the property division process by hiding assets can face a penalty for hiding assets in divorce, not to mention that there may be criminal charges for contempt of court, fraud, and perjury.
What happens if you hide money in a divorce? ›
Contempt of Court: If a spouse is found to have hidden assets, they may be held in contempt of court. This can result in fines, sanctions, or even jail time. Perjury Charges: If a spouse lies under oath about the existence or value of assets during divorce proceedings, they can face perjury charges.
What are the consequences of hiding assets? ›
Aside from criminal charges and financial penalties, hiding assets can also significantly impact the divorce settlement. Courts take a dim view of asset concealment and often penalize the offending spouse by awarding a larger portion of the marital assets to the other spouse.
Is hiding money from your spouse a crime? ›
In California, some penalties for hiding marital assets in a divorce, considered contempt of court, can include perjury charges and loss of the hidden marital asset. Hiding matrimonial assets is illegal under any circ*mstance.
What is a red flag that a spouse is hiding assets? ›
Gives Money to Friends or Family
It's a red flag if your spouse suddenly has loans to repay to family and friends. This is a tactic some people use to have a pile of cash when the divorce is final. Check your account for suspicious withdrawals.
Can you hide a bank account during divorce? ›
As part of the divorce process, both spouses are required to disclose all of their financial assets. However, sometimes one of the spouses may not fully disclose all of their assets. In some cases it is merely an oversight.
What is financial infidelity in a marriage? ›
Financial infidelity occurs when one partner hides or misrepresents financial information from the other, such as keeping secret bank accounts or hiding purchases. It does not necessarily involve marital infidelity, though it can lead to divorce.
How do I stash money before divorce? ›
Here are the seven most common ways that spouses hide assets:
- Hiding Cash. It's not sophisticated, but it is easy! ...
- Buying New Possessions. ...
- Paying Off a Family Loan. ...
- Not Reporting Cash Income. ...
- Delaying Bonuses or Promotions. ...
- Delayed Invoicing and Salary Payments. ...
- Custodial Accounts for Children.
Here are some of the most common ways to hide your assets:
- Form a privacy trust.
- Use a land trust to hide real estate.
- Form an LLC in a state that does not make ownership public.
- Set up an offshore trust.
- Maintain funds in an offshore bank account.
- Purchase cryptocurrency.
In United States law, money laundering is the practice of engaging in financial transactions to conceal the identity, source, or destination of illegally gained money.
If you feel that your spouse is hiding money, the best advice is to educate yourself about the household finances, find concrete evidence, and look for ways to have a healthy and open conversation with your spouse.
Can you go to jail for financial infidelity? ›
Is financial infidelity illegal? Financial infidelity, while deeply damaging to the trust and foundation of a marriage, is not illegal in the criminal sense. However, it can lead to legal consequences in the context of divorce proceedings.
Is financial infidelity financial abuse? ›
In their control of the finances, they aim to control and manipulate their partner on a deeper, more emotional level. Ultimately, abuse is a complex thing and it often must be assessed on a case by case basis. But it is important to note that financial infidelity can absolutely be a form of abuse.
Can I sue my husband for hiding money from me? ›
Yes. If hiding the asset rises to the level of the breach of fiduciary duty, the California Family Code can even order damages against the spouse.
How do I deal with my wife hiding things? ›
If you can, talk to your spouse at a time where they feel safe. Often, a spouse hides something because they don't feel like they have a safe place to share. Or, they hide something because they are doing something wrong and fear that the truth might hurt you.
How to tell if your wife is hiding money? ›
There are expensive jewelry, art, and other valuable items that have suddenly disappeared. An increasing number of cash withdrawals have been made from your bank account. You discover that your spouse has opened a private post office box. This may be another sign that your spouse hides assets and other documents.
How can I protect my money from divorce? ›
Consider a Trust for Divorce Planning
A domestic asset protection trust (DAPT), for example, could be used to transfer assets to a trustee on behalf of your children. The assets wouldn't be considered marital property at this point so your spouse would not be entitled to them.
How can I prove my husband is hiding money? ›
Bank account statements: These statements will provide valuable information about your spouse's income, regular expenses, and whether unusual deposits or withdrawals were made. Bank statements will also show whether a large sum of money was used to purchase real estate or other assets in your spouse's name only.
How to find out if a spouse has a hidden bank account? ›
There are several methods to find hidden bank accounts, such as:
- Conducting online asset searches.
- Hiring a private investigator.
- Making legal requests for financial information.
- Utilizing state-sponsored websites and resources.
One way to protect your 401k in a divorce is through a Qualified Domestic Relations Order (QDRO). A QDRO is a legal order that allows for the division of retirement benefits between divorcing spouses.
