Rectifying the problems brought on by an omitted asset depends on when it was discovered and whether the omission was intentional or an honest mistake. The most common scenarios in this situation are:
1. Discovery of an omitted asset because of mistake or inadvertence after a judgment has been entered
2. Discovery of an asset that was intentionally omitted during the dissolution proceedings
3. Discovery of an asset that was intentionally omitted after a judgment has been entered
Omitted Asset Through Mistake or Inadvertence Discovered After Judgment
If you discover an asset that was not disclosed by your spouse through mistake or inadvertence and a judgment has been entered in your case, you and your spouse will continue to own the property as tenants in common. However, the court can still order the asset to be divided even after a judgment has been entered.
Each spouse is also required to provide records of community transactions and property.
Intentional Concealment of an Asset Discovered Before Judgment
Thanks to the good-faith standard in marriage, the intentional omission of an asset is handled very differently than one brought on by mistake or inadvertence. As part of having a “fiduciary duty” to your spouse before and after separation, you’re required to be truthful about all assets and transactions that could affect the community estate. Each spouse is also required to provide records of community transactions and property.
If you discover your spouse did not disclose an asset or refuses to do so, you may file a Motion to Compel a further response, or file a Motion for an Order preventing your spouse from presenting evidence on issues that should’ve been covered in the disclosure declaration. You can also ask the court to impose monetary sanctions against your spouse to deter future misconduct and request that he or she pay your reasonable attorney fees and costs.
You may also file a breach of fiduciary claim with the family law court in conjunction with the dissolution action, in a separate action, or on the death of a spouse. The breach can be filed at anytime if it is brought in conjunction with the dissolution or death of a spouse. Otherwise, if it’s filed after the judgment entry, it has a three year deadline from the date you learned of the breach of fiduciary duty.
Depending on the asset, the court may do any of the following:
- Order an accounting of the asset or property.
- Determine the rights of ownership in, the beneficial enjoyment of, or access to the asset or property.
- Determine the classification of the asset or property.
- Order changes to the title of the asset or property by adding the name of the injured spouse to the asset or property, unless doing so would affect the rights of a third person such as partners of a business, professional corporation or association.
- Award 50% of the value of the undisclosed asset plus attorneys’ fees and costs to the injured spouse. The court may value the asset when the breach occurred, when the asset is sold or disposed, or when the court makes the award. The court also has discretion to use the highest value on any one of these dates.
- Award 100% of that asset to the other spouse if the court finds that nondisclosure of the asset was a result of oppression, fraud or malice.
- Order that the spouse who did not disclose the asset pay monetary sanctions, regardless of whether there is a showing of harm.
Intentional Concealment of an Asset Discovered After Judgment
If you discover an asset was intentionally concealed after a judgment has been entered, you may have grounds to set aside the judgment based on fraud. You can also file a separate tort action against your spouse. When setting aside a judgment based on fraud, different laws apply depending on whether the judgment was entered before or after January 1, 1993.