Locating Hidden Assets in a Divorce
When the bonds of matrimony start to crack, some may be tempted to play a high-stakes game of hide-and-seek with their assets. However, this practice is not only unethical but also illegal. Learn how you can find out the truth about these hidden assets.
Some Methods for Hiding Assets
Some of these methods can be quite sophisticated. While they can be used for legitimate asset protection, employing them to deceive the other spouse can lead to serious legal consequences.
The smoke-and-mirrors approach involves underreporting income, transferring assets to third parties, creating offshore accounts and using shell companies. Individuals may underreport their earnings or transfer assets to family members or business associates to remove them from their names. Many times, offshore bank accounts in tax havens and shell companies with no legitimate business purpose can also be used to obscure ownership of assets.
In divorce proceedings, spouses may attempt to conceal assets to reduce their obligation for alimony or property division. They might undervalue assets, overstate debts or hide cash or investments. Some individuals may also invest in non-reportable assets, like precious metals, artwork or collectibles, that are less likely to be detected.
With the popularity of digital currencies like Bitcoin, a new avenue for hiding assets has opened. Cryptocurrencies offer a degree of anonymity and can be stored in encrypted wallets and traded without a direct link to the owner.
Other tactics include establishing complex trust structures and engaging in cash transactions that leave minimal paper trails.
Knowingly hiding assets is a serious matter. If you think your spouse is not being truthful, you need to consult with a New Jersey divorce attorney to determine how to proceed
How Hiding Assets Can Affect the Divorce
When it comes to divorce proceedings, the parties have to be completely truthful throughout the process. Concealing assets is considered fraud in most jurisdictions. Some of the legal penalties can include hefty fines and sanctions. However, the repercussions don’t stop there. In some cases, this form of deception can even lead to jail time.
Hiding assets can cause a domino effect, impacting both alimony and child support arrangements. These arrangements are based on accurate financial information provided by both spouses. However, if one spouse decides to hide assets, it will reduce their apparent income or financial resources. In turn, the receiving spouse will not get what they are entitled to.
In New Jersey and most other states, property division is based on the principle of equitable distribution. When one spouse hides assets, this division becomes lopsided. The innocent spouse may not receive their fair share of the marital estate. In these cases, reaching a just settlement becomes challenging.
The Disclosure and Discovery Process
The courts want to maintain integrity in all divorce proceedings. For that reason, both parties need to have access to all relevant financial information. This is known as disclosure and discovery.
Both spouses are legally obligated to provide complete and accurate information regarding all of the following:
With this transparency, the courts can determine an equitable distribution of marital property and establish appropriate support arrangements.
The divorce discovery process involves various methods to get that vital financial information. Attorneys for both parties can request documents relevant to the divorce, such as:
These documents can reveal hidden assets or financial discrepancies.
Additionally, depositions can uncover hidden assets by allowing attorneys to ask questions about financial matters and potential concealment.
Sometimes, an interrogatory is required. These written questions are posed to the opposing party. They must provide detailed answers regarding their finances.
How To Find Hidden Assets
If you believe your spouse may be hiding assets, there are a few steps to take to uncover the truth.
You may want to find a certified forensic accountant, financial investigator or another professional specializing in locating hidden assets. They have the skills and knowledge to conduct thorough searches and follow the legal procedures required for asset discovery.
You will need to provide your financial and legal team with as much information as possible. You’ll need to provide them access to:
The team will conduct a full review of financial records to identify any irregularities or discrepancies that could indicate hidden assets. They may even use forensic accountants who can help identify hidden assets or undisclosed income.
Depending on the circumstances, your team may conduct asset searches using public records, databases and financial institutions to uncover hidden accounts, properties or other assets.
If the individual in question owns or has an interest in a business, your team may conduct a detailed review of the company’s financial records to identify hidden assets or income diversion. Some of these assets may be concealed through third parties or business entities. Your need may need to review any suspicious transactions or transfers of assets to family members, friends or business associates.
If necessary, your attorney can use legal procedures, such as subpoenas, court orders and depositions, to compel the disclosure of financial information and the location of hidden assets.
Depending on the situation and the purpose of asset discovery, you may need to take legal action to recover the hidden assets. In divorce cases, a Full Disclosure Order can be sought from the court and levied against the other spouse. This will compel the other spouse to provide complete and accurate financial information, including any previously concealed assets. Failure to comply with a court order can result in contempt of court charges.
Preventing Hidden Asset Issues
While addressing hidden asset issues during divorce is vital, you can take a few proactive measures to prevent these issues from arising in the first place. Establishing financial transparency and openness during your marriage can go a long way in preventing future conflicts.
Prenuptial and postnuptial agreements are legally binding contracts that outline how assets and debts will be divided in the event of a divorce. These agreements can establish transparency from the start of the marriage. This document ensures that both spouses know their financial rights and responsibilities.
Along with that, open and honest communication about finances is key to preventing hidden asset issues. Couples should regularly discuss their financial goals, assets, debts and expenditures. Jointly managing finances can help create a sense of shared responsibility and accountability.
Finally, seeking advice from professionals, such as financial planners or accountants, can be beneficial during the marriage. These experts can help to manage finances, make investments and plan for the future. Their involvement can also discourage any attempts to conceal assets, knowing that financial matters are being closely monitored.
Contact a New Jersey Divorce Attorney Today
If you suspect your spouse might be hiding assets, the Law Offices of Kelly Berton Rocco may be able to assist. Our legal team can answer your questions about the divorce process. We’re committed to ensuring you receive what’s rightfully yours in this challenging time.
Reach out to our Hackensack office at (201) 343-0078 or visit our website to schedule a consultation. Let us help you navigate this complex journey toward a fair resolution.