Disagreements about money are often a major source of marital strife. A recent study by the National Endowment for Financial Education notes that, even during marriage, about 41% of American adults admit to hiding financial activities from their spouse, and 75% say that financial dishonesty has impacted their relationship. 

When partners face divorce, either spouse may feel a temptation to conceal or spend down shared assets to avoid a court-ordered division of property. However, doing so violates California law and may lead both an adverse court outcome and potential monetary or even criminal penalties. 

1. Divorce requires full financial disclosure

To ensure a fair division of assets and equitable support arrangements, the law requires that each spouse make a full and complete financial disclosure within 60 days of filing for divorce. 

During this discovery process, both spouses must report both separate and shared assets, including real estate, bank accounts, cash and investments as well as debt, income, expenses and personal property. 

2. Automatic temporary restraining orders restrict financial activity

In California, the law imposes an automatic temporary restraining order on both spouses following a divorce petition and summons. 

The ATRO prohibits either partner from spending, concealing, transferring or taking other significant financial actions before divorce finalization without written consent from the other spouse unless necessary for ordinary expenses, including legal fees. 

3. Hiding assets may have serious consequences

If a spouse fails to disclose any assets, either through oversight or purposeful deception, the court may impose penalties either during or after the divorce process. 

In cases of intentional dishonesty, a judge may award the entirety of any concealed property to the other party, force the dishonest spouse to pay the other’s attorney’s fees, impose an additional fine or even find him or her guilty of perjury and contempt of court.