During a divorce, both spouses are obligated to disclose financial information to effectively determine property division. In some divorces, a spouse will hide assets and property from financial disclosure. This may be done to spite the other spouse, keep specific assets for themselves, or skew the division of property in their favor. If you suspect your spouse of being secretive and concealing assets, you need representation from a multi-state divorce attorney to protect your rights.
Hidden assets are more common in divorces where one or both spouses have high-value assets or even a business. When the court determines property division, the value of separate and marital assets is important, so property inventory and valuation are essential. When one spouse hides assets, the other spouse may be left with significantly fewer assets than they deserve. This is a violation of the other spouse’s rights. Spouses who hide assets may be subject to civil or criminal penalties.
How Can a Spouse Be Hiding Assets During a Divorce?
A spouse who wants to hide marital or separate assets will usually do so before the proceedings begin but after a couple has decided to get divorced. However, some have even hidden them during the divorce proceedings. Common ways that a dishonest spouse may conceal assets include:
- Delay business deals, raises, or bonuses until after a divorce is finalized to appear to have fewer assets than they do.
- Undervalue a business, or high-value assets like art, vehicles, property, and homes.
- Store assets with friends or family until after the divorce, sometimes in the form of gifting the item or money.
- Pay fake loans to third parties.
- Create a retirement account or trust to put assets in, which the other spouse is unaware of.
- Have an offshore bank account that the other spouse is unaware of, often to transfer marital assets into.
- Waste marital assets either on expensive assets that they may then undervalue or on other individuals.
- Hide their income, bonuses, or other resources from the other spouse.
- Fail to report cash payments from their job.
- Create custodial accounts under a child’s name so that the assets in them do not count as marital property.
- Fail to disclose tax returns or overpay the IRS to receive significant tax returns after the divorce.
Spouses are more likely to be successful in hiding assets if the other spouse does not have full knowledge of marital or separate assets or access to financial statements. If you are getting a divorce and you suspect that your spouse is wasting or hiding marital assets, speak with a qualified divorce attorney.
How Can You Find Hidden Assets?
To find potential hidden assets, you may want to:
- Review financial information, statements, and locations that you legally have access to. This may help you determine if your spouse is hiding assets.
- Use the court-ordered process of discovery. When you don’t have legal access to documents and information, these may be accessed through the discovery process.
- Work with your attorney to determine the right steps to discover any income or assets that your spouse is hiding. An attorney can help you use the right tools of discovery and effectively investigate your spouse.
How Does the Divorce Discovery Process Help?
Discovery can be informal or formal, but formal discovery is essential if you believe that your spouse is hiding assets. The process of formal discovery is much easier and more effective with the help of an experienced attorney. Some tools used to discover concealed assets include:
- Interrogatories: These are written questions that your spouse must answer truthfully. These questions may pertain to assets, although some states have specific questions for divorce discovery.
- Document Requests: You or your attorney can request financial documents and statements, often those that you know exist or that you find based on information discovered in interrogatories.
- Deposition Testimonies: These are in-person or video call interviews where your attorney will ask your spouse questions under oath, often about specific assets or financial documents.
- Subpoenas: You or your lawyer can request documents and information directly from the agency that holds it, such as banks, schools, or other institutions.
When discovery is court-ordered, these methods can be used to find assets. If a spouse does not disclose all information or lies under oath, they can be charged with perjury and contempt of court.
Q: What Happens When a Spouse Hides Money During a Divorce?
A: If one spouse is discovered hiding marital or separate assets, they can face civil and criminal consequences. When both spouses are required to provide information on assets in formal court discovery, purposefully hiding assets is contempt of court, which may result in criminal charges. When a spouse does not disclose their assets during informal financial disclosure, the court will likely divide assets differently in an equitable distribution state.
Q: What Is Considered Marital Misconduct in Missouri?
A: Marital misconduct in Missouri includes any behaviors that harmed the marriage and relationship, including:
- The wasting of marital assets
- Substance abuse disorders
- Domestic violence
- Any form of abuse
Although you are not required to file for a fault-based divorce in Missouri, you can. Marital misconduct could also impact whether the court assigns spousal support to a spouse or not. Because Missouri is an equitable distribution state, marital misconduct that impacts marital assets may also affect how assets are split.
Q: How Are Assets Split in a Divorce in Nebraska?
A: Nebraska, like most states, is an equitable distribution state for the court-ordered division of marital property in a divorce. To achieve an equitable distribution of assets, the court will assume that each spouse has an equal claim to assets gained during a marriage. The court may then alter that assumption based on certain factors about the couple’s marriage.
Although the final split of assets could be equal, it often is not. A fair and reasonable split will be determined based on factors such as the length of the marriage and each spouse’s contributions to marital assets.
Q: What Is the Penalty for Hiding Assets in a Divorce in Illinois?
A: There may be several civil and criminal penalties for a spouse who is discovered hiding separate or marital assets. These include:
- The court may award all hidden assets to the other spouse.
- The court may award the other spouse with a greater portion of marital assets.
- The spouse may be required to pay the other spouse’s legal fees and costs.
- The spouse may face criminal consequences for contempt of court.
Contact Stange Law Firm
You need an attorney experienced with discovery and investigation if you think that your spouse is hiding assets. Contact our team at Stange Law Firm today.