Divorce is hard. To ease the burden, some people attempt to hide assets. Divorce lawyers always recommend against hiding assets during divorce. Divorce is a time to be truthful, as the court will likely uncover any hidden property anyway. There are methods of tracking them down, even when a person feels as though their plans to hide the assets are foolproof and certain. In divorce proceedings, honesty is always the best policy. Once you’ve disclosed all your assets to your lawyer, the divorce lawyer will be able to determine what is worth mentioning to the court and what isn’t.
Why People Try to Hide Assets Anyway
People navigating the pains of ending a legal marriage relationship face significant and sometimes sudden financial stress. This new reality is compounded by mental and emotional stress. It’s natural to want to protect your livelihood, your life savings, the things you’ve worked hard to create, and be able to survive once the divorce is over. In normal circumstances, this instinct is good, but squirreling away things like this backfires during a legal separation or divorce proceeding.
People try to hide their expensive belongings and assets in many familiar and predictable ways. With the developments in modern technology, there are even more ways of finding a person’s hidden treasures. Here are some ways you should definitely not try to keep your assets a secret.
Hiring an “Employee” at Your Business
If you own a business, it’s tempting to put a new “employee” on the books but not hire anyone. This method is meant to take a chunk of the business profits away as an expense and therefore be more likely to not be touched by the court. The idea is to then “fix the mistake” once the divorce is finalized.
Why this doesn’t work: The discovery process can request the employment verification papers for all employees, along with all banking and credit statements for every facet of your business.
Putting Assets in the Name of a Minor Child
One of the first things a person tries is to stash money in a bank account, Certificate of Deposit, or other investment in the name of their minor child.
Why this doesn’t work: The discovery process is allowed to ask for all your banking statements, including a list of accounts and balances, transactions, histories, etc., for yourself and all your minor children at any given banking or investment institution. A child can only have an account with parents as a joint party. Once the bank produces these documents (if you refused to hand them over yourself), the court can easily see where they went.
Giving Assets Away or Making Large Donations
Some people try to give away large, expensive items or purchase expensive items like art pieces or jewelry for friends. They feel once a letter of intent or bill-of-sale with $0.00 on it or a title has cleared that the transaction is done. The asset is no longer theirs. Similarly, people will attempt to make extra charitable donations.
Why this doesn’t work: The most straightforward way for your divorce lawyer to uncover hidden property or money is by looking at bank statements and other records that show where you have spent your time, energy, and money since the divorce was filed. Assets are often discovered when divorce attorneys look through financial documents such as tax returns from before and after the date of separation.
Conclusion
It is essential not to hide assets in divorce proceedings because experienced divorce lawyers will find out through court requests, combing social media for bragging posts, observing potentially expensive items in pictures, and hiring specialists like a financial forensic investigator. In conclusion, divorce is a time to be truthful, as attempts to hide assets usually backfire. Judges do not look favorably upon the party that tries to hide assets.
