What Happens When You Hide Assets During a Divorce in Phoenix? - The Phoenix Family Law News Blog

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What Happens When You Hide Assets During a Divorce in Phoenix?

Arizona is a community property state, which means assets accumulated during the marriage are generally presumed to be the equal property of both spouses.

Unfortunately, a staggering number of spouses hide their finances from one another. It's also not uncommon for people who are contemplating divorce to start setting aside money or start buying items for personal use. But because that's community property, failing to disclose such actions during a divorce may amount to hiding assets.

And lying during divorce proceedings -- including hiding assets -- is illegal.

Consequences of Hiding Assets

When someone lies under oath, he or she can be charged with perjury. In the divorce context, when spouses sign financial affidavits, they are swearing, under penalty of perjury, that they are telling the truth about their finances and aren't holding anything back in their financial disclosures.

Courts have a variety of remedies at their disposal when spouses aren't forthright about their assets. For instance, if your spouse knowingly violates asset disclosure laws, a judge could order him to pay your attorney fees and/or fines. Even more serious, the judge could dismiss his or her claims. In the most serious cases, your spouse could even face jail time.

What to Do If Your Spouse is Hiding Assets

If you suspect your spouse is lying or hiding assets, you should let your divorce attorney know immediately.

Your attorney can take certain steps during the divorce discovery process to ensure your spouse is being forthright about his or her finances. This may include:

  • Document production. Your attorney can request your spouse to produce a variety of documents -- such as account statements, financial records, tax returns, and loan applications -- to help find hidden assets.
  • Interrogatories and requests for admission. During discovery, your attorney may submit interrogatories and/or requests for admission that will require your spouse to answer a variety of questions and admit or deny certain facts under oath.
  • Depositions. If a spouse lies about assets during a deposition, a sworn out-of-court testimony, he or she can be charged with perjury. Sworn testimony is a particularly powerful way to get straight answers from a dishonest spouse about hidden assets.
  • Motions to compel. If your spouse is uncooperative during the process, your attorney can file a motion to compel. The court can then compel compliance by your spouse or sanction him or her.

If you are contemplating divorce and you believe your spouse is hiding assets, consult a divorce attorney and express your concerns from the get-go.

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