An important part of the divorce process involves the division of marital assets. Whether the separation is between high-value individuals or involves inheritance, business or other expensive assets, without complete transparency, not all is fair in divorce court. It is not unusual for some partners to hide assets in their divorce.
The law requires divorcing couples to share their assets equitably. Equitable distribution rules help to minimize confusion and dishonesty between separating partners. Divorcing spouses certify on a financial affidavit their personal and marital finances and assets. Withholding or providing misleading information carries legal repercussions that may include jail time.
Ways spouses hide assets in divorce
Discovering hidden assets requires a thorough investigation. Common issues that lead to the discovery of hidden assets in divorce include:
Falsify tax returns – Some dishonest spouses file their tax returns separately to keep their partners from learning about their finances/assets.
Wasteful/erroneous purchases – Expensive or a sudden increase in business asset acquisitions are a common way some people hide assets to lower their business income/profits.
Become a loan shark – Some partners lend money to their friends and family members to avoid sharing their money and property with their spouses in divorce.
The discovery process helps to limit the probability of hidden assets. In some cases, that is not enough to prevent some hidden assets from reappearing after the divorce. Under those circumstances, a divorce decree modification may become necessary.
What to do if there are suspicions of hidden assets
The prospect of having to share property and money with their exes is enough to motivate some divorcees to cheat and lie about their assets and income during the separation process. To err on the side of caution, potential divorcees should investigate all financial activity and challenge potential issues that could lead to the discovery of hidden assets. Divorcees may benefit from utilizing the services of an attorney or forensic financial accountant to ensure they receive their fair share of marital property in their divorce settlement.