The Risks of Hiding Assets: The Community Property Presumption

The parties in a divorce can spend a substantial amount of time and resources litigating about property division. As a result, some people might be tempted to hide or otherwise omit certain assets from preliminary disclosures. However, this can land you in hot water even after your divorce proceedings have concluded.

Assets that would have qualified as community property could be subject to future division by the Court if they were undisclosed. Even property that would have qualified as your separate property could be at stake until a determination is made as to whether it is in fact your separate property. A major reason to disclose all assets in a divorce is what is known as the “community property presumption.”

The Community Property Presumption

All property acquired during marriage is presumed to be community property unless a spouse can overcome that presumption and prove that the property is that spouse’s separate property.

Separate property consists of three things: 1) property owned or claimed by the spouse prior to marriage, 2) property acquired by a spouse during the marriage by gift, devise or descent, and 3) recovery for personal injuries sustained during the marriage except recovery for loss of earning capacity.

The burden of demonstrating that a certain asset is not community property but is a spouse’s separate property falls on the party claiming it as their separate property.

Failing to Disclose Property

Even if you believe that an asset is your rightfully your separate property, choosing not to disclose it is not a good idea. The separate property character of an asset is a legal determination made by the court.

For example, if you inherited property exclusively in your name, you should still disclose it so it can be confirmed as your separate property as part of the divorce. By confirming it as your separate property, it cannot be subject to division by the court in your divorce.

Intentional failure to disclose community property asset can have harsh consequences such as the court awarding the entire asset to your spouse or awarding it to your spouse in a disproportionate manner. Additionally, the court could also award the innocent spouse attorney’s fees and expenses.

It is always best to disclose all assets in a divorce whether they are community property or separate property so they can be properly awarded in the divorce and all property issues resolved. Failure to do so can lead to costly future litigation.

Contact Coker, Robb & Cannon, Family Lawyers for Comprehensive Advice

If you are caught up in a divorce where there are significant rights and assets on the line, obtaining experienced counsel to represent you is an important step in the right direction. At Coker, Robb & Cannon, Family Lawyers, we have the necessary knowledge and training to make sure your rights are properly protected.

Call our office at (940) 293-2313 or contact us online to arrange a consultation about your legal rights and options today.

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