28 Feb Concealment of assets: A cause for concern in many high-asset divorces
Since many people may hide assets during divorce, spouses should know how property can be concealed and how this concealment can affect the settlement.
Accurately inventorying personal and marital property during divorce can be an intensive and time-consuming process for spouses who own significant assets. For many of these spouses, detecting that a partner is hiding assets can also be difficult. Alarmingly, research suggests that such concealment is not uncommon, and it can have devastating long-term effects when it goes uncaught.
The exact number of divorces that involve hidden assets isn’t known. However, according to The Huffington Post, one study found that in two-thirds of marriages, spouses are concealing money from one another. Additionally, CNBC reports that about 7.2 million married Americans hide at least one bank account or credit card from their spouses. These behaviors may be even more common among divorcing spouses, who stand to permanently lose property as a result of the divorce decree.
Spouses may hide assets during a high net worth divorce in a variety of ways, according to The Huffington Post. Common tactics include the following:
- Holding secret bank or investment accounts
- Transferring assets temporarily to family members or friends
- Deferring incoming payments, bonuses or promotions
- Failing to report retirement assets or benefits
- Keeping a secret stash of cash
- Purchasing physical property that can easily be undervalued
It’s essential for divorcing spouses to be alert to these potential tactics, since asset concealment can have huge impacts during divorce.
In Missouri, the concealment of separate or marital property can significantly affect the way that property is divided. Most property obtained during marriage is subject to equitable distribution between spouses. Nondisclosure of this property can deprive a spouse of assets that he or she is legally entitled to. Hidden separate property can also affect a divorce settlement, since family law judges consider the amount of separate property that each spouse owns when dividing marital property.
Unfortunately, under state law, division of marital property is one of the aspects of a divorce settlement that cannot be modified later. Spouses who discover hidden assets after their divorces have been completed might have other means of recourse. However, it may generally be more affordable and efficient for spouses to address the issue of hidden assets during the initial divorce proceedings.
To reduce the risk that marital or separate assets will be overlooked, spouses should consider working with a family law attorney who has experience finding these assets. An attorney, along with financial specialists such as forensic accountants, may be able to help a spouse protect his or her rights and uncover any wrongfully concealed assets.