California Divorce and Omitted Assets

By | September 25, 2012

A common question I get from people is what happens if we forget to list a community property asset? Well, assuming the asset was never listed on the declarations of disclosure and never found its way into the judgment, the court should have jurisdiction to divide the asset. Family code section 2556 gives the court continuing jurisdiction to award omitted assets. It is just speculation on my part, but it seems to me most of these omitted assets tend to be retirement accounts. Maybe people are so used to not thinking of the funds as available assets that they forget to deal with them in their divorce. Whatever the reason for omitting the asset, the court can still divide it down the line. Sometimes the omission is an innocent mistake and both parties are content simply dividing the asset with an eye toward equity. At other times, one party may have tried to pull a fast one to keep the other spouse from enjoying the benefits they are entitled to. In either case, a quick post judgment motion can bring the issue before the court for decision. If there were unclean hands in the form of a breach of fiduciary duty, the court may award the asset entirely to one side, depending on the equity of the situation. But by and large, unless there is some smoking gun that squarely pins the crime on one party, such a draconian remedy is not often used and courts tend to do equity in these kinds of situations.

If the parties are open to dividing the forgotten assets equitably, such a modification can easily be handled with mediation. Call our office today to discuss your options for mediating a post-judgment division of omitted assets.