Divorce is a legal as well as an emotional process. Both parties legally have to disclose all their assets and liabilities when it comes to dividing assets. However, some people try to hide assets to keep more of the property to themselves. It is unethical and illegal to hide assets during a divorce. Understanding the consequences is important.
Common Ways People Hide Assets
We have to realize how people would attempt to hide their assets. You should be extra vigilant if you’re going through a divorce and suspect this happening. Some of the most common methods include:
- Transferring Assets to Third Parties
This involves giving money, property, or valuable assets to friends or family members to hold temporarily, only to get them back after the divorce.
- Underreporting Income
It’s especially common with business owners. To lower the value of the assets, some spouses will understate their income or overstate their business expenses.
- Opening Secret Accounts
For some people, they open hidden bank accounts, credit cards, and investments — they may even deposit money into these bank accounts, they’re not going to tell the other spouse about.
- Hiding Physical Assets
Secret locations or trusted third parties are placeholders for these items, such as jewelry, artwork, or cash, which will not be accessible to the spouse.
A study found that 31 percent of US adults in shared financial relationships are engaging in deceptive behaviors over money—58 percent hide cash, 54 hide minor purchases, and 34 lie about finances during a divorce.
Legal Consequences of Hiding Assets
Hiding assets during a divorce is illegal. Apart from being an ethical breach, it has serious legal consequences and can radically influence the factor that will determine the outcome of the divorce. If you are caught hiding assets, these are some potential consequences:
1. Revised Property Division
One of the common consequences is a revised division of property. However, if you lose in court, the court is likely to assign a higher value to the assets you were trying to hide so that, in the end, you may lose those assets.
In addition, the court can give the honest spouse a larger percentage of the assets to make up for hidden assets.
2. Fines and Penalties
A spouse who is caught hiding assets might have fines to pay. However, the fines can vary from small to big depending on the seriousness of the case. The other spouse might also be ordered to pay for the dishonest spouse’s legal fees in uncovering the hidden assets.
3. Contempt of Court Charges
Hiding assets during the divorce proceedings can lead to a charge of contempt of court. There could be serious consequences for someone who was found in contempt of court for asset concealment, and that could mean jail time in extreme cases.
Further legal action could be taken about a spouse lying intentionally or withholding information if the court finds this.
4. Loss of Trust
The court may take into account dishonesty when making decisions about custody or alimony. If the judge believes one spouse was dishonest, they may award custody or a larger portion of assets to the other spouse.
Furthermore, the act of hiding assets can erode trust, which is vital in making fair decisions regarding shared parenting or spousal support.
5. Criminal Charges
Hiding assets can lead to criminal fraud charges in some cases. If the assets are worth a lot they could come up with criminal prosecution and some fines and prison. If you intentionally hide assets in a deceptive manner that misleads the court, this is particularly the case of fraud.
How to Protect Yourself from Asset Concealment?
Financial motivation is the reason that people want to hide assets. Division of property in a divorce often includes real estate, bank accounts, retirement funds, and personal belongings. Certain people may think that by hiding assets they do not have to give back more than their fair share.
In case you are divorcing, it’s always vital to shield you from hidden assets. Here are some options to guard yourself from these kinds of attacks:
1. Hire a Forensic Accountant
A forensic accountant can help identify hidden assets by examining your spouse’s financial records. These professionals are skilled at locating financial accounts that may not be immediately obvious.
2. Keep Detailed Records
Make sure you have copies of all financial documents. Document anything that could help track assets and liabilities in case of a dispute.
3. Review Past Tax Returns and Financial Documents
Tax returns can reveal discrepancies in your spouse’s income or asset holdings. Look for anything unusual or unreported that could indicate hidden assets. Be sure to ask for copies of any relevant documents.
4. Secure Your Financial Information
Keep your personal and financial information in a safe place, away from your spouse’s access. Password-protect your accounts and keep copies of important documents in a secure location, such as a safety deposit box or a trusted third party.
5. Reach out a Lawyer
A qualified divorce lawyer can direct you through the process. He will protect you from any unlawful behavior. If you have concealed your assets in your deed, your lawyer will be aware of the legal implications of this action and help you to take the appropriate legal action.
Conclusion
Hidden assets during divorce are a serious offense which has financial and legal consequences. If they catch you, you can lose the hidden assets, face consequences, and experience criminal charges. On the other hand, doing careful documentation, hiring experts, and asking for legal advice can prevent an unfair divorce process.
Don’t wait for something to resolve itself if you think your spouse may be hiding assets. If you need help, be proactive in finding a forensic accountant or a divorce lawyer.
Affordable Divorce Center is the best place where we help people in the complicated divorce process, including hidden assets. We will assist you in obtaining a fair settlement. Contact us today!
