Hiding Property In Divorce: Detection Methods and Consequences

Desperate spouses can sometimes take desperate measures to hide their assets in a divorce. Facing the possibility of financial hardship resulting from the divorce and the division of a limited amount of money can lead one spouse to hide assets from the other spouse. 

Notwithstanding the reasons for intentional nondisclosure of assets during a divorce proceeding, hiding assets from the court can result in serious consequences.

Hiding Assets In Divorce Proceedings

Penalties for intentionally withholding financial information about assets can include a lesser amount of marital assets. You can even be ordered to pay your spouse’s attorney fees.

Even though a divorce matter is considered a civil proceeding, deceitful and fraudulent conduct can give rise to criminal liability, including fraud, contempt of court, and perjury.

Financial Hardship Not A Legal Defense

Even if you now face creditor lawsuits because your spouse used joint credit cards to make expensive purchases during the marriage without your permission, it does not excuse you for violating the law by committing perjury and concealing assets. 

The judge in a divorce case will not deprive creditors such as credit card companies of their rights to collect a debt by allowing one spouse to hide their assets.

Joint Spousal Debt Results In Joint Obligations

Suppose you were personally obligated to pay the debt before the divorce (for example, you and your spouse both signed a promissory note). In that case, the creditor could collect from you even though the judge assigned this debt to your spouse.

You do have the right to try to get the money back from your spouse by filing a cross-complaint against the former spouse.

Hiding or Selling Property

What spouses may sometimes do to conceal their individual assets:

• Intentionally under-reporting income and stashing the cash in someone else’s account.
• Setting up fake accounts to pay for services that were never received to lower one’s total net worth.
• The spouse secretly hides and does not report all income to the other spouse.
• Intentionally over-reporting individual income to obtain a larger refund after the divorce.
• Hiding large amounts of cash in a friend’s safe deposit box.

If one spouse suspects the other of hiding and disposing of assets in a divorce proceeding, consider hiring the services of a licensed private investigator. Often investigators will work with forensic accountants to discover hidden bank accounts, stocks, and bonds that have been hidden away, sometimes years before filing for divorce

Court Order Against Hiding Assets

In some states, such as California, divorce filing forms include an automatic order restraining either spouse from liquidating, transferring, or otherwise hiding assets. If your state does not provide an automatic order, you might request a “restraining order” to accomplish the same thing. 

Discovery of Violation After Divorce Case Concluded

After the divorce proceedings have concluded and the court issues a final divorce decree, should one party subsequently learn their former spouse hid assets, in most states, the law will allow you to reopen the case.

Divorce Lawyers

If you have questions or require additional information about your legal rights and obligations, consult a verified Divorce Lawyer as soon as possible.