According to a story in Forbes magazine, a study conducted by the National Endowment for Financial Education found that 31% of adults admitted that they had been deceptive about money with their spouse. 58% of those surveyed said that they actively hid money from their spouse, while 54% readily admitted to concealing minor purchases from their partner. While these sometimes small deceptions seem relatively common amongst married couples, the concealing of assets can be a very serious matter in the event of a divorce proceeding.
It seems only natural that during a contentious time like divorce that one partner or both may seek to retain assets for themselves and through subterfuge, try to keep their partner from getting their hands on the property. The problem with concealing assets in a divorce is that you are required to sign a financial affidavit at the start of most divorce proceedings, and that affidavit is a sworn statement under penalty of perjury. During contentious divorce proceedings, the financial affidavit is required, and it may even be used in some non-contentious divorces, so both spouses are required to tell the truth when it comes to their money and other assets.
If a person signs the financial affidavit and intentionally fails to disclose certain assets, he or she may be held in contempt of court and may suffer additional penalties for doing so. In some cases, individuals have been forced to pay the other person’s attorney’s fees or have been required to pay heavy fines for concealing assets. In other cases, the spouse who tried to conceal assets was forced to forfeit all of them to his or her spouse.
The deliberate hiding of assets is not only a dishonest move but a petty one that can have serious consequences if discovered. So where are these hidden assets? Where are they most commonly placed? According to another story (again, by the super sleuths at Forbes), the most common ways to disguise or undervalue assets include:
- Purchasing high-value items (like artwork or furniture) for an office, or adding more items to a valuable hobby-collection
- Hiding cash in a safe deposit box or other location.
- Underreporting income on tax statements (with the rationale that if the government doesn’t know about it, it can’t be brought up in divorce proceedings)
- Overpaying the IRS in the hopes of concealing the money for the time being and getting it back as a refund later
- Setting up accounts in other people’s names (friends, new love interests, or children are most common) to place large sums of money for concealment
- Transfers of stock to “dummy accounts” or again, to accounts outside of the spouse’s scope or view
A skilled divorce attorney may be able to help you discover if your spouse is concealing assets in a divorce, and can most certainly advise you of the steps you need to take if your former partner is attempting to hide assets to prevent you from getting your fair share in the divorce proceedings. In the end, by paying attention to his or her actions during the process, you may be able to identify the signs that they are hiding something from you.