Common Ways Individual Spouses Hide Assets in a Divorce
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The major issue in divorce, besides children issues, is the division of property. Everything acquired during the marriage is subject to division by the divorce court: homes, cars, furniture, stocks, mutual funds, savings accounts, insurance policies, retirement accounts, etc. In community property states, these assets are split more or less equally, while in traditional states, they are split according to a variety of fairness factors.
Divorcing spouses will commonly try to hide assets that are due to be split, in order to retain 100% of that property. Property exempt from division includes property owned before the marriage, inheritances, and gifts to individual spouses. Thus, there is no motive for hiding these assets.
Hiding assets is illegal, and may constitute perjury, willful nondisclosure, or contempt of court. The judge will levy significant penalties for these crimes. On the other hand, if spouses have complicated financial profiles, they may not be aware of all of their accounts. However, this complicatedness would also provide the spouse a believable excuse for purposely diverting funds to another account leading up to the divorce. A forensic accountant may have to be called in to investigate.
There are other tricks spouses use to hide assets. If a spouse owns a business, she may allow customers to defer their debts until after the divorce, or purport that business is slow when in actuality it is booming. A spouse may allow real property to waste away in anticipation of a divorce. A spouse may pay too much in taxes, and then ask for a refund after the divorce.
As the most common way to hide assets is to set up a secret account, spouses are advised to investigate any evidence of decreased funds in current accounts, other mailboxes, and suspicious financial mail.
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Last Modified: 08-26-2014 03:12 PM PDT
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