Divorces can be messy and complicated, but one thing you never want to do is hide assets when you’re going through a divorce. A legal requirement for divorcing couples is disclosing all assets they have, which includes debt, income, and expenses.
When one partner has more than the other, it may be tempting to cheat or lie to keep more of an asset to themselves. Although it’s illegal to hide assets in a divorce, some people still do it, especially if they’re the higher income earner.
People hide assets for a variety of reasons, but the main one usually is not having to share the majority of their money with their divorcing partner. These people often use a variety of “dirty tricks” to lie, including undervaluing, hiding or understating marital property.
They might also overstate debts or report a lower income than they actually have. The person hiding assets in a divorce does so to keep more property or assets for themselves and want to prevent their ex from getting a fair settlement.
According to the National Endowment for Financial Education, about 31% of US adults who have assets with their spouse mention that they’ve lied about money in their marriage. While it can be either party in a marriage, many times it’s more likely for men to lie about their assets than women.
Lying during a divorce proceeding is not only wrong and unfair, but it’s also illegal. The rules of civil procedure indicate that when an individual signs a court document that they are agreeing to the fact that the contents of the document are true and correct.
So, when a couple of signs the Financial Affidavit required in every contested and some uncontested divorce cases, they are swearing that they are telling the truth about all their finances. This includes all debts, income, assets, expenses, liabilities and more.
Because lying about one’s assets in a divorce case is illegal, it’s essential to hire a skilled divorce lawyer to handle the case. Having someone with professional expertise will help a divorcing person stay on the right side of the law and will still have your financial future in their best interests.
A divorce attorney will ensure that you’re not only telling the truth about your assets but that your ex-spouse is doing the same so that the divorce settlement is as fair as possible.
What Happens If You Lie About Assets in A Divorce?
If you lie under oath, you will face some serious consequences. Although penalties for hiding assets in a divorce will vary from state to state (and even case to case), you’ll still be in blatant contempt of the court no matter where your divorce is finalized.
If a judge finds out that someone is knowingly violating asset disclosure laws, then the judge might make them pay for their ex-spouse’s attorney fees and fines. Or the judge will dismiss all of the lying party’s claims. For more serious cases, jail time can be given to the person hiding assets in a divorce case.
The judge might also make you pay additional penalties and provide your ex-spouse with a larger distribution in the divorce settlement (or even the entire amount), instead of splitting it if you were honest from the start.
If you lie about your assets or try to hide them, you’ll also lose all respect and credibility by the judge for the duration of your case. The fact that you lied about assets will make the judge think that you’re lying about other things in the rest of the divorce process.
How to Uncover Hidden Assets?
There are different things a person can do to try and uncover the truth about hidden assets their ex-spouse might be hiding. The first is to hire a private investigator to follow around your ex-spouse to see if they use a bank you didn’t know about if they actually work full time.
You can also employ a forensic accountant, who is a financial expert and will look at all the family’s finances to see if there is money being hidden. They’ll be able to help you figure out if there are secret accounts or if expenses are more than the income your ex-spouse claims to bring home.
During a divorce, the court will allow divorcing spouses to seek out certain information during the discovery phase of the case. This is where you can subpoena various people to come to help you plead your case. You can subpoena your ex-spouse’s employer and get records or even get their bank statements.
In some cases, you might not find out about hidden assets until after the divorce is finalized. You may learn later that your ex-spouse earns more than he claimed during the divorce process, sold a property they had during your marriage or more.
If this happens, you can still get them in trouble and have a fair settlement. You simply have to file a motion in court about the hidden asset in the court your divorce was finalized and ask that your case be reopened.
However, amending a divorce agreement is much easier if you live in a community property state, which means that all assets earned in a marriage are now joint assets. But inequitable distribution states, the court might not change the final divorce settlement.
In these states, you’ll need to do a lot of research during the divorce process and anything found afterward won’t be held up in court. But you could still sue your ex-spouse in civil court, claiming monetary damages.