Marital assets must be divided when a couple gets divorced. However, especially in contentious divorces or high asset divorces, one spouse may be tempted to hide assets to keep them out of property division.
You should never do this, as you are required to make a full financial disclosure to the court during the divorce process. But if you are worried that your spouse may try to hide assets anyway, it is important to understand some of the tactics they may use.
Delaying payments
One tactic is for a spouse to delay payments for money that was earned during the marriage. For example, they may have earned bonuses or commissions, or they may run a business with outstanding invoices. They could try to delay receiving this income until after the divorce so that it is not included in the property division.
Creating fake debts
Another common tactic is inventing debts or financial obligations and then paying them off. For instance, a spouse may suddenly “remember” that their parents lent them $100,000 for college two decades ago, and that the debt needs to be repaid. In reality, there was no debt. Instead, the money is just being transferred to the parents, with the intention of transferring it back after the divorce is finalized.
Undervaluing assets
Another tactic is intentionally undervaluing assets. When dividing tangible property, assets cannot always be split directly, as with a bank account. Instead, marital assets may be traded back and forth so each person receives items of roughly equal value. If a spouse intentionally undervalues certain assets, they may end up with a much larger share of the true overall value.
If you are concerned that your spouse may attempt to hide assets or that the divorce may become highly contentious, it is important to carefully consider all of your legal options.