Omitted Property Items

In San Diego, there are many forms of property including real property, personal property, bank accounts, certificates of deposit, money markets, individual retirement accounts, stock options both vested and non vested, 401K, KEOGH and vehicles. In a divorce in San Diego, there are mandatory forms which need to be filed which include the Schedule of Assets and Debts in order to obtain a judgment of dissolution or legal separation. This pleading is signed under penalty of perjury by each spouse and is used for the division of assets and debts.

Many client's ask what happens when my spouse does not disclose or list the assets he or she has? This is a very important question since the basis of the division in accordance with the law has [as it's foundation] that all assets and debts will be divided. The first strategy would be to send written discovery including written interrogatories and request for both production of documents and for admissions. The second strategy would be to use the power of the subpoena to obtain information. The third strategy is a deposition in which oral testimony is taken under oath however it is normally taken in the office of the attorney and not in the court house. The fourth strategy would be to hire a private investigator to conduct an asset search. There are additional strategies if the first four are not successful.

Some of these assets can be difficult to ascertain. Cash hidden in a safety deposit box may be hard to prove as well as payments to relatives or friends for business expenses which never occurred. In addition, there can be employment benefits such as stock options which are granted after the date of separation however were granted for the period of the marriage itself. There may also be business opportunities which were not disclosed.

Fortunately, the San Diego Superior Court has the power to make orders after a divorce is final for assets not listed. Paraphrasing the Family Law Code, if an asset was not adjudicated because it was not listed, then the party can file a motion [Order to Show Cause] asking the Judge to make this determination. The Judge is instructed, by Family Law Code Section 2556, to equally divide the omitted asset equally between the parties unless the Judge finds that there is good cause and that the interests of justice require an unequal division of the asset.

The risk in not fully disclosing is that a Judge will find that there is good cause to make an unequal division of the asset and that this is required in the interests of justice. In a case decided by the Court of Appeals in California in 2001, a spouse won the California lottery with a pool from her work and her share was over $1,000,000. She did not inform her spouse and then filed for a divorce and did not disclose this asset. Of course, the other spouse found out after the divorce was final and the Trial Court found fraud under Family Law Code Section 1101 [as well as many other Family Law Codes] and awarded her spouse 100% of the lottery winnings. The other spouse appealed and the decision was affirmed by the Court of Appeals who also used a Code of Civil Procedure {3294} stating that the spouse's actions were fraudulent, oppressive and with malice.

In conclusion, our advice as San Diego divorce lawyers is always fully disclose and never make any misrepresentations about the valuation of any asset [or debt] and to ask for a settlement in accordance with the law regarding an equal division of the assets and debts with the exception of "bankrupt" marriages and breach of fiduciary duty cases which may necessitate an unequal division however these are not from the non disclosure on the Schedule or other pleadings. This will help avoid unequal division of any asset [or debt] which was unintentionally left out of the Schedule and any attorney fees and costs [including sanctions] which may result from this omission.

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