A divorce involves a lot of emotional trauma for all involved. The division of any assets is a controversial issue. It’s why divorce proceedings sometimes take years to resolve.
Unfortunately, there’s always the problem of hidden assets. Studies have shown men are more likely to hide assets than women. Assets could include money, property, and cars.
It’s entirely illegal to hide assets. You’re essentially lying under oath, and this carries serious penalties.
In this article, we discuss what happens if you do lie about hidden assets. We also offer support for parties who believe their significant other is hiding assets.
Removing a Misconception
To start with, we need to address a common misconception. A dangerous stereotype has formed over the years. It’s about men getting a raw deal in divorce proceedings.
It’s a myth that judges and lawyers favor women in divorce proceedings. People might point to women getting half of all assets plus child support, but it’s important to understand the context.
Let’s start with child support payments. In most divorce cases, children go and live with their mother. Statistics show that this is what happens most often. That’s why the man pays child support.
In terms of asset division, this is largely to do with traditional statistics. Historically, men have been the breadwinners in American households. Women either take part-time work or look after the children.
To not provide the woman with half of the assets would be to destroy her. She might not have a home to go to or financial assets to rebuild her life. This is why hiding assets is a despicable and spiteful course of action.
Common Ways to Hide Assets
People might decide to hide their assets through some of the following methods:
Physically hiding assets. This could involve giving a car to someone else, or simply transferring money away from bank accounts.
- Exaggerating business debts.
- Overpay the IRS to reclaim it later on.
- Defer any salary payments.
- Transfer any stocks and shares.
- Offshore bank accounts in countries like Belize, the Cayman Islands, and Switzerland.
This is where you need a legal professional to help you locate any accounts. Assets can be difficult to trace, especially if they’re set up in someone else’s name.
Furthermore, the only way you can catch the other person out is if you can prove why they were removed.
For example, if they transferred a stock a year before the divorce this would be a perfectly legal transaction. If they did the same thing a week after divorce proceedings were filed, it would raise alarm bells.
This can get extremely complex. Proper legal help is crucial. You still have to follow all the rules when uncovering hidden assets.
How Do You Know if Someone is Hiding Assets?
It’s difficult to know when someone is hiding assets in the first place. You can’t accuse someone without proper justification for it. Luckily, there are ways you can get proper justification.
Someone who is likely to hide assets will have certain characteristics about them. If their behavior is strange, this alone gives you the right to start digging deeper.
Firstly, if they control bank account information in your household, you have this uncovered. If they have complete control of the household finances, this is grounds for a search. They might be secretive or deceptive.
If statements are rerouted to a private mailbox, this makes it easy for them to hide assets. This usually happens if they aren’t self-employed.
They have suddenly accumulated a large amount of business debt. This gives them the chance to offload a lot of money.
In some cases, they might begin major financial reconstruction before a divorce has been filed. In the event you know a divorce is coming, they might start to move early. Moving assets before a divorce has been filed is no different to doing it after it’s been filed.
How to Start Uncovering Hidden Assets
Transferring money out of the United States is easier than ever before. A lot of offshore tax haven’t don’t recognize lawful judgments in this country. It makes many funds impossible to collect.
This doesn’t mean you can’t uncover hidden assets. It just makes it much more difficult. Hire someone with the keen eye of competent accident lawyers. You need someone who can walk through the mindset of someone who hides their assets.
They have to act like forensic investigators. They’ll follow paper trails and read through any seized electronic devices. Since you’ll need warrants in a lot of cases, you need their support.
A skilled lawyer can find any asset. Some funds might well be off limits and there’s nothing you can do to collect them, but they can’t hide everything. The goal now is to uncover not to collect. That’s a different course of action completely.
What Happens if Someone Lies about Hidden Assets?
Every person must sign a financial affidavit when involved in a contested divorce. They might even have to sign it in an uncontested divorce case.
It essentially means they have disclosed all financial assets. They’re swearing under oath that they aren’t hiding anything. And this is under the penalty of perjury.
Since it carries the same weight as an oath, they’re risking a lot by hiding anything. It’s breaking the law and there are a range of penalties judges can use.
It does differ from state to state, and from case to case. It largely depends on to what extent they have lied. Here are some of the penalties that can potentially be applied:
- Incarceration. Breaking an oath heavily will usually lead to a prison sentence. This is only applied in the most extreme of cases.
- Payment of the opposition’s legal fees. These fees would have to come out of your own pocket.
- Payment of investigation fees. This would reimburse the opposing party for the money they had to spend uncovering your assets.
- Dismissal of claims. If you’re contesting the ownership of an asset and you hid it you could have your claims dismissed.
- Awarding of said assets. It’s not uncommon for hidden assets to be awarded in their entirety to the wronged party.
Whatever penalty is applied, it will lead to a criminal record. Criminal records can lead to losing your job, losing your income, and becoming permanently disadvantaged in the labor market.
It’s Not Worth It
The penalties alone make hiding your assets a fruitless task. It will only lead to further problems later on.
In one such case, a man from Michigan hid his assets during the primary trial process. Once the assets were found after the finalization for the divorce, they were awarded to his ex-wife.
There are ways you can limit your losses. One of the best methods is through straight negotiation. Talking everything out nearly always leads to an amicable settlement for all involved.
Regardless of what you decide to do, it’s important to employ legal help. Divorce is the most highly charged legal process. You don’t want to risk losing what you’re entitled to by letting your heart rule your head.
A legal professional guides you through the process and ensures you don’t miss anything. It’s the best way of getting a fair deal!