This article looks at common methods for concealing assets during divorce settlement negotiations.
According to Main Street, one U.K. study found that about one-fifth of all divorces involved at least one spouse trying to conceal assets from the other spouse. While hidden assets are a potential problem during just about any divorce, they are especially problematic in high-asset divorces. The complex nature of many high-asset divorces often provide the higher-earning spouse more opportunities to conceal assets from the other spouse. For those who are currently in the midst of a divorce, it is vital to ensure that their former spouse is being completely honest about his or her assets. Hiding assets is not only illegal, it could also lead to an unfair divorce settlement.
How assets are hidden
As Forbes points out, there are a myriad number of ways for unscrupulous spouses to attempt to conceal assets before or during a divorce. For example, one spouse may begin purchasing art or collector's items that could be high in value but also easily overlooked or undervalued by the other spouse. Additionally, one spouse could give friends or family members "loans" that he or she knows will be returned in full once the divorce is finalized.
Hidden assets are especially common when one spouse also owns a small business. That spouse could defer income or a bonus until after a divorce is finalized, so that such income does not get included in calculations to determine alimony and support, for example. Additionally, the business-owning spouse may begin declaring personal expenses as business expenses or under-report the amount of profit made by his or her business.
Why hidden assets matter
The above is just a sample of a few of the many ways an unscrupulous spouse may try to conceal assets. Methods for hiding assets can range from the rudimentary to the highly complex, but no matter how sophisticated the operation, hidden assets all share one thing in common: they deny the other spouse the ability to negotiate for a fair settlement. For a settlement to be negotiated fairly and in good faith, both spouses must be completely aware of the size of the marital estate. If there is any deception concerning assets, then one spouse may end up receiving much less than he or she is due.
Uncovering hidden assets can be difficult. Furthermore, snooping through a former spouse's financial and personal records could land one in legal trouble. There are legal avenues to help uncover concealed assets, but those avenues should only be pursued with the assistance of a family law attorney. An attorney who is experienced in cases involving hidden assets can offer clients advice on how to investigate any potential allegations of concealed assets and help to negotiate a divorce settlement that is in the client's interests.