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Hiding assets in a divorce can have long-term consequences

| Nov 13, 2018 | Divorce |

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Couples facing a high-net-worth divorce are already looking at a process that is likely to be long, complex and, perhaps, very public. If one spouse is hiding assets, the risks will outweigh the benefits, and the unintended consequences could stretch far into the future.

More financially sophisticated

In the case of a wealthy couple seeking a divorce, one party is usually more financially well-off than the other. This may be the spouse that has inherited or earned most of the money. He or she deals with money every day, makes the investments, buys the properties and continues to build wealth. Upon seeing divorce on the horizon, this party may begin hiding assets both to keep them out of the property division phase of the process and to lessen the overall estimation of wealth.

Building a team

The other party, although not as adept with financial matters, may suspect the existence of hidden marital assets and enlist the help of professionals. A legal team will include experts, such as a business appraiser and a forensic accountant, who will join the attorney in an investigation. They will perform valuations on properties, businesses and liquid assets. They could also find and examine discrepancies, such as unusual transactions or transfers of title. Professionals who do this kind of work say hidden assets almost always come to light.

Dealing with consequences

The party who circumvents or obscures facts relative to marital assets is often only looking at the impending divorce itself. This is a mistake because a judge will take a dim view of financial impropriety, which can tilt the distribution of assets in favor of the other party. Furthermore, after the exposure of hidden assets, family feuds may develop over the assets and the extent of the family fortune. With a high-profile couple, this is often fodder for the scandal sheets. The effort to hide assets will not only affect family relationships, but also the integrity of the party at fault, plus his or her reputation and standing in the business community.

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