How a spouse may attempt to hide assets

On Behalf of | Nov 28, 2023 | Division Of Property

Ideally, your spouse will not try to hide assets as the two of you get divorced. It is illegal, especially if they are intentionally hiding those assets just to keep them away from you. Instead, your spouse is supposed to accurately report all assets to the court as marital property gets divided.

That being said, divorce can be contentious. If you and your spouse are not on good terms, you may worry that they will attempt to hide assets during the split. Here are a few ways they may do it.

Transferring assets

Your spouse might transfer ownership of assets to a third party – most often a family member or friend – to keep them out of reach during divorce proceedings. After the divorce, that other person will just give the assets back.

Underreporting income

They may underreport their income, especially if they are self-employed or have control over their earnings, to reduce the apparent wealth or income they possess. Some people will also try to defer earnings, such as commissions that were earned or raises that were already approved, until after their divorce.

Overpaying debts or expenses

Interestingly, deliberately paying too much toward debts or expenses can create a refund check in the future. For instance, your spouse may pay the IRS too much in taxes, planning to keep the entire balance of the refund – which they hope to get after the divorce – to themselves.

Hiding assets in unusual places

Your spouse may start concealing assets in less obvious locations, such as safety deposit boxes, cryptocurrency or offshore accounts that may be harder to trace. For instance, one very simple tactic people sometimes use is to take cash back at the grocery store or the ATM, and then they put this extra money into a safe deposit box under only their name.

Remember, these actions can have legal consequences. Courts take asset hiding very seriously, and if discovered, the consequences for the individual attempting to conceal assets can include penalties, fines or a reconsideration of the divorce settlement. If you think that your spouse may be hiding assets, you must know what legal steps to take. Gathering evidence and working with legal counsel can help as you work to discover those hidden assets and fight for a fair division of marital property.