HomeFinanceMy ex-wife hid stocks during our divorce. Can I sue her?
My ex-wife hid stocks during our divorce. Can I sue her?
“Will I need to get an attorney to help me with this?” (Photo subject is a model.) – Getty Images/iStockphoto
My ex-wife did not disclose the stock and stock options that were issued to her during our divorce financial disclosure. Because she handled all the financial things, I thought she was being honest. It wasn’t until after the divorce that I realized that she had withheld the information. I believe that she intentionally withheld this information. I have contacted her about it, but she refuses to answer my calls.
Is there a way for me to deal with this on my own, or will I need to get an attorney?
The Ex-Husband
Related: My husband liquidated his IRA without my knowledge prior to our divorce. Is this legal?
It may be that her financial savvy was one of the reasons she chose to hide these stocks; the temptation just proved too great. – MarketWatch illustration
You have answered the first part of your question.
You will need to employ an attorney because you have tried to resolve this matter on your own, and it hasn’t worked. The divorce decree has been issued. Your wife has walked away with these stock options, and your calls have gone unanswered. It may be that her financial savvy was one of the reasons she chose to hide these stocks; the temptation just proved too great. You should act immediately. The sooner you file a case, the greater your chances are of success.
The statute of limitations for contesting a divorce decree due to alleged fraud varies by state. In California, for example, there are time limits and deadlines for processing divorce cases, although there is actually no explicit statute of limitations for filing a divorce complaint. It depends on the nature of the complaint. Still, you will have a limited time, typically within two years of discovering the malfeasance, to file a motion to set aside the judgment by bringing a new action for fraud or perjury.
Like most states, California law requires full financial disclosure by both parties in the divorce case. Failing to abide by these laws can lead to severe consequences for the non-disclosing party — in this case, your wife — including the possibility of overturning the divorce judgment. The judge could order her to hand over 50% of those stocks or even decide to punish her by instructing her to hand over ALL of the stocks and stock options that she tried to hide.
“During marriage and at divorce, spouses owe each other a fiduciary duty,” according to Argyris Mah, a law firm based in San Jose, Calif. “This duty includes the obligation to make full disclosure to the other spouse of all material facts and information regarding all assets in which the community has or may have an interest and debts for which the community is or may be liable, to provide equal access to all information regarding those assets and debts, and the duty to not take unfair advantage of one’s spouse.
“If your ex hid an asset but there isn’t much evidence that they did so intentionally, with a conscious disregard for your rights, or with the purpose of subjecting you to a cruel or unjust hardship, then you may be entitled to 50% of the value of the hidden asset in addition to your attorney’s fees and court costs,” it adds. If they did so with a “conscious disregard for your rights, or with the purpose of subjecting you to a cruel or unjust hardship, then you are likely entitled to an award of 100%.”
One of the most infamous cases goes back to 1996, when a California woman won $1.3 million in the lottery and filed for divorce 11 days later. She didn’t tell her husband, or anyone else, about her windfall. Two years later, her husband found out about it and sued her. Superior Court Judge Richard Denner ruled that she acted out of fraud or malice and awarded her husband 100% of her winnings. Had she been honest, they would have walked away with half. “We shared the same bathroom — and we even shared the same electric toothbrush,” the husband said in court papers.
If you win, your ex-wife will pay your court costs too.
Previous columns by Quentin Fottrell:
I’m 67. My wife, 48, is financially illiterate. How do I teach her to manage our money? After all, I won’t be around forever.
‘He is increasingly angry’: My troubled son lives with me. How do I ensure he is financially secure after I die?
‘I am my mother’s caregiver’: My mom, 93, added my name to her retirement accounts. Will she qualify for Medicaid?
