Whether the parties honestly thought they had covered everything, or if one party was hiding assets, sometimes property gets left out of the divorce proceedings and is therefore never included in the final judgment. Fortunately, there are ways the parties and the court can handle this situation, even years after the final divorce judgment.
First, the court has continuing jurisdiction under California Family Code section 2556 to award community estate assets or debts not awarded in the judgment, regardless of whether jurisdiction to award those assets and debts was expressly retained by the court. A party can seek such an award by filing either a post-judgment motion with a “Request for Order” form (FL-300). At one point, parties needed to file a separate civil action to divide the remaining property, but luckily, this is no longer the case.
California Family Code
Once a post-judgment motion is filed, the court will then have to divide each omitted asset (or debt) equally unless it finds that an unequal division is fairer. Of course it’s best to avoid making a post-judgment motion altogether; the parties should try to discover and assert every tenable community property claim before final divorce proceedings. This is because, in ruling on a Family Code section 2556 motion, a court may well consider whether a party’s failure to timely assert his or her rights warrants an unequal division in the “interests of justice.” Keep in mind, also, that a party’s intentional failure to disclose community estate property may give rise to significant monetary penalties. Intentional failure to disclose could also be argued as grounds to set aside the final divorce judgment altogether, and require a re-negotiation of the parties’ entire assets and debts.
Because parties conceal or just plain forget about assets, a proactive solution to this problem would be to include an “omitted asset” clause in the final marital settlement agreement, granting the court express jurisdiction to address the issue of another asset they may come up later. The clause can also grant the innocent spouse specific remedies he or she may pursue when adversely affected by the lack of knowledge of an asset prior to divorce. This ensures that the innocent party gets to choose among the remedies within the clause, instead of leaving it to the court to decide.