Despite the fact that 42% to 45% of first marriages now end in divorce, most people don’t begin their legal partnership with the inkling that their happiness might not last forever. Still, marriages end for all sorts of reasons — and money is one of the most common. Even if you never disagreed on finances during the course of your relationship, it’s entirely possible that monetary matters could make your rift even more pronounced as you go through the divorce process. That’s especially true if you or your spouse tries to hide assets from one another. To truly protect yourself and to ensure your divorce goes as smoothly as possible, here’s what you’ll want to know about hidden assets.
Why Might Someone Hide Assets During a Divorce?
In the state of Pennsylvania alone, 32,985 divorces and annulments took place in 2019. Nationwide, there were millions of other marriages dissolved that same year. While you might hope that your partnership could be dissolved amicably, the reality is that it’s often every person for themselves. It’s critical to protect yourself during divorce, which often involves ensuring your own finances are safeguarded. However, some people might cross the legal line in an effort to withhold what they feel is rightfully theirs. The catch is that those assets may actually not belong to them in the eyes of the law.
Because courts will typically attempt to divide shared assets equally, this could leave one spouse feeling slighted from a financial perspective. If one former partner feels their ex will end up with more than their fair share after the divorce, they might be tempted to hide some of their assets in order to keep them from taking everything you have. In some cases, you might feel an urge to hide assets in order to avoid or lower child support payments. When you feel as if someone is going to take your hard-earned wages and possessions away from you without any say in the matter, it makes sense why you might feel like hiding your assets is the solution.
What Kinds of Assets Are Commonly Hidden in Divorce?
One of the difficult things about identifying hidden assets is that there are potentially a number of them. Your spouse could attempt to hide bank accounts, credit cards, or financial statements containing underreported income. They might also hide valuable collections, such as antiques or artwork, or things like travelers’ checks, bonds, stock options, cryptocurrency, retirement accounts, or other expenses. Although as many as 70% of small businesses are in debt, some former partners might attempt to hide assets by “repaying” a fictitious debt to a friend or family member, allowing that person to hold onto that money for safekeeping. In some cases, they could even sell shared assets before the divorce is finalized at a lower value in an effort to keep that money for themselves. They could also overpay on their taxes or delay earnings increases in an attempt to hide assets from you.
What Can You Do About Hidden Assets
Aside from watching your shared bank accounts and being on the lookout for suspicious financial activity, you may need to place your faith in the court. The important thing to remember here is that hiding assets is an illegal practice — and that the discovery process will play an important role during your case to ensure your ex won’t get away with it. If it’s revealed that your ex attempted to hide assets after signing a sworn document that their provided financial information was accurate, a judge can impose penalties like lowering their asset share or being forced to pay for your legal fees. However, it’s essential that you work with a lawyer who will do their due diligence to ensure you aren’t being cheated out of everything to which you’re entitled.
There’s no doubt that divorce can be extremely expensive. While it’s understandable that your partner might not relish the thought of splitting assets equally, that’s the norm for most divorcing couples. Once you know that assets can be hidden, it’ll be much easier to spot when something isn’t quite right and fight for your fair share.
