Identifying and valuing assets in a divorce is typically a straightforward process; however, some spouses prepare for divorce proceedings by “hiding” assets. What are hidden assets, how are they discovered, and are they worth pursuing? These are the questions we will answer below.
What Are Hidden Assets?
The court is supposed to split the assets of a couple between the two spouses, but some people attempt to hide or get rid of their assets in an attempt to keep them from being divided between their soon-to-be-ex. These assets are called “hidden assets,” and they can dramatically impact the fairness of asset division.
Hidden assets are possessions, resources, and finances that are purposefully tucked away so the court cannot find them.
Common hidden assets include:
- Cash, bonds, mutual funds, stocks;
- Cash value in insurance policies and variable annuities;
- Antiques/collectibles; and
- Hobbyist items (guns, gems, etc.).
How Are Assets Hidden?
There is almost no limit to how people can attempt to hide assets. Some spouses will “give/donate” money to friends and relatives that they will give back to the spouse after the divorce. Other spouses will place possessions or investment certificates into safety deposit boxes in the names of family and friends.
Common ways to hide assets include:
- Using joint funds to pay off a personal credit card or mortgage debt;
- Using funds for personal “business expenses” that are fake;
- Colluding with an employer to receive a bonus or raise after a divorce;
- Placing funds into a 401(k), pension, or another personal financial plan;
- Using a revocable trust to “grant” money to someone;
- Intentionally tanking a business on paper to devalue the business during a divorce.
Best Ways to Locate Hidden Assets
Here are some of the best ways to unearth hidden assets created by your spouse:
- Looking through an income tax return for hidden assets;
- Looking through bank account transactions;
- Identifying canceled checks and who they're payable to;
- Identifying mismatched lifestyle choices and declared income;
- Identifying fraudulent business write-offs; and
- Checking public records for clues.
These are just some of the ways that someone can hide assets. If you are worried that your spouse is hiding assets and you want a divorce, hiring an experienced family law firm can help you discover hidden assets you never knew existed.
Call (516) 773-8300 now for a free consultation concerning your divorce proceedings.