Hiding Marital Assets

Hiding marital assets can have disastrous effects

The best way to explain how hiding marital assets can affect you is through a real California family law case. If you hide assets or try to cheat your spouse, this really could happen to you.

In re Marriage of Rossi (2001) 90 Cal.App.4th 34

Denise and Thomas Rossi married in 1971. In early November 1996, Denise and her co-workers formed a lottery pool, each contributing $5 per week. In late December, the group won the lottery jackpot — $6,680,000, paid in 20 equal annual payments of $66,800 each to every contributor from 1996 through 2015.

Before receiving her first lottery check, Denise filed for divorce — intending to keep all the money for herself. She never told Thomas about the winnings. She did not disclose the lottery in any of her divorce documents. To keep him from finding out, she used her mother's address to receive her lottery checks.

Judgment of dissolution was entered April 7, 1997. Thomas filed for bankruptcy the following year.

In May 1999, a letter arrived at Thomas's home address regarding Denise's lottery winnings. In July 1999, Thomas filed a motion to set aside the dissolution based on fraud, breach of fiduciary duty, and failure to disclose. He asked the court for 100% of the lottery winnings.

The trial court agreed with Thomas and awarded him 100% of the lottery winnings, expressly finding that Denise had intentionally failed to disclose them in the marital settlement agreement, the judgment, and her declaration of disclosure. The Court of Appeal affirmed.

Spouses are fiduciaries

A fiduciary is a person who holds a place of great trust. In marriage, spouses are held to the highest ethical standards in financial dealings that affect the other spouse.

As the Rossi case shows, California takes honesty between spouses seriously. Many laws protect a spouse from financial abuse by the other spouse — and the consequences of hiding assets can be complete forfeiture of what you tried to hide.