Warning: Your Spouse Might Be Hiding Assets – How to Find Out and Make Them Pay
Divorce is an emotionally charged time. Resentment, entitlement, and disappointment may seep into the process, which might encourage spouses to act in duplicitous ways. They may think they are entitled to more than they really are and might take steps to actively hide assets in an unethical attempt to get more than their fair share during the divorce. With today’s technology, it is easier than ever to cleverly hide assets. However, it is also easier to identify them, too. Here’s what you need to know about hidden assets during a divorce and how to track them down.
There are certain red flags that a spouse may be hiding assets. If your spouse is exhibiting one or more of these behaviors, talk to your attorney about the possibility of hidden assets:
• Your spouse has changed passwords so you can no longer access financial information
• Your spouse refuses to talk about finances with you
• Your spouse’s lifestyle seems to be more expensive than their known income warrants
• Your spouse intentionally refused or delays income during the years leading up to divorce
• Your spouse has removed assets with no explanation
• Your spouse has recently purchased luxury items or expensive items
• Your spouse has opened up new bank accounts without telling you about them
• Your spouse has transferred money from a joint account to an undisclosed location
• Your spouse has provided incomplete financial disclosures
Consequences for Hiding Assets
There are many potential penalties for hiding assets during a divorce in New Jersey. First, hiding assets may commonly involve perjury because spouses must sign affidavits and make representations to the court about their finances during the divorce process. Perjury is a third-degree crime in New Jersey, which can result in three to five years in prison and a fine up to $15,000.
Additionally, a spouse who has hidden or concealed assets may face hefty financial sanctions. The court may decide to award the innocent spouse a larger share of marital assets to punish the wrongdoer. Even if a divorce decree is already in place when the concealment is discovered, the court can still open the judgment and change the award of assets. If third parties were involved in the concealment (such as a friend, employer, or accountant), they may also face liability.
Commonly Hidden Assets
Some assets that are commonly hidden or intentionally undervalued in divorce include:
• Business valuations – Business owners may try to reduce the value of a business by changing their accounting books, manipulating salaries, inflating expenses, or understating assets.
• Collections – Some spouses have expensive collections of art, antiques, jewelry, designer purses or other collectibles.
• Trusts – A spouse may attempt to transfer assets to a trust to try to hide them.
• Cryptocurrency – A key characteristic of cryptocurrency is that they are not personally identifiable. This can make it difficult to identify and track cryptocurrency and non-fungible tokens (NFTs) down.
• Money – There are many ways that clever spouses might try to hide money from hiding tangible funds to moving it to a digital account to “loaning” a friend or family member money. Some spouses may collude with their employer to defer a commission or bonus until after the divorce is finalized. Some spouses even use their own children to hide money by placing money in an UTMA account.
How to Find Hidden Assets
Fortunately, there are many ways to uncover hidden assets. You can review financial documents that are currently available to you that may show the identity of hidden assets, their location, or transfers, such as tax returns and the disclosures in your divorce. You can also find if your spouse has registered assets in their name and do a public search for them.
If you believe that some assets were disclosed but that their value is underreported, you can request a professional appraisal. You can also hire financial experts to uncover hidden assets, such as forensic accountants and digital forensic analysts who can analyze cash flow, perform asset tracing, or find traces of hidden cryptocurrency. The divorce court can order your spouse to pay for these experts in appropriate situations.
You can also work with a family lawyer who is experienced in uncovering hidden assets. Susan Pontoriero has more than 15 years of experience handling divorce cases and has seen all the tricks. Contact Pontoriero Family Law, LLC for a confidential consultation where we can discuss how we can help you track down hidden assets.