Generally, under California law any property that is acquired during a marriage is considered community property. In an earlier blog post, we discussed a scenario in which a divorcing spouse might be able to keep certain assets considered as separate property from a marital estate. However, it is more likely that most couples will share equal ownership of any property and assets they have acquired throughout their marriages.
Unfortunately, the Internal Revenue Service also considers both spouses as equally sharing the tax liability of the marital asset in community property states. This means that some spouses may attempt to conceal wealth during a divorce in an effort to avoid tax liability.
For example, a concealing spouse who owns a business may place a friend or family member on the company's payroll and provide them with extraordinary compensation. Another strategy to reduce tax liability is for a spouse to temporarily transfer assets to a friend, hoping to reverse the ownership of those funds after the divorce has been finalized. Still another form of concealment is when a spouse fails to disclose the existence of retirement plans or stock options available through his or her employment.
Divorce is never an easy time in a person's life. Often people are faced with significant financial challenges with little time to prepare. Finding a job or being forced to relocate to a new home can be a daunting task for anyone who is also attempting to uncover wealth concealed by his or her spouse.
Based in Livermore, California, our law firm is one of the largest Bay Area firms that exclusively handles family law cases. The attorneys working at our firm have over 35 years combined experience representing clients in a wide variety of family law issues. Prospective clients can contact our law firm either by phone or online to arrange consultations with our attorneys.