A complex part of a divorce is the division of assets and property. This process includes financial statements and valuations of all marital and separate property. Because Missouri is an equitable distribution state, the value of separate assets is important when the court determines how to separate marital property. In most divorces, spouses are honest about these financial details, and the division of property goes smoothly.
However, there are times when a spouse may decide to hide assets during a divorce. This is common if one or both spouses have a business or if one or both parties have a high net worth. A spouse may plan to hide assets over time, or they may do so quickly after a divorce is filed. If you and your spouse decided to get a divorce, but took some time to file it, this may have given a dishonest spouse the ability to hide assets or income. A spouse may do this to prevent their spouse from gaining specific assets or to gain more than their share of marital assets.
Ways a Spouse May Be Hiding Assets
A spouse may be hiding assets or income during divorce proceedings using methods such as:
- Fake loans that need to be paid to friends, family, or others once divorce proceedings start
- Transferring marital funds to a third party through fake payments or gifts
- Creating a retirement account for assets that the other spouse doesn’t know about
- Moving marital funds to a separate account without their spouse’s knowledge or approval
- Delaying paychecks or bonuses until after the divorce
- Hiding income or bonuses from their spouse
- Creating a trust that the other spouse is unaware of
- Cash payments that are traceable to martial account withdrawals
- Hiding income in businesses
- Undervaluing a business
- Undervaluing high-value assets such as vehicles, art, or furniture
- Accounts created in a child’s name
- Undisclosed tax returns
- Overpaying the IRS
Spouses who hide assets during the divorce process are violating the other party’s rights. There are many other methods your spouse may use to hide assets. If you don’t have access to marital financial statements, and you suspect that your spouse is being dishonest with financial assets, there are steps you can take. It can be helpful to work with an attorney who knows the right processes to discover hidden assets and income.
The Divorce Discovery Process for Finding Hidden Assets
If you believe that your spouse is hiding assets, and is being dishonest during financial disclosure, you may need to utilize the discovery process. This is especially necessary if you don’t have access to essential financial information. The discovery process is the formal and legal way that you and your attorney can request financial information. Methods in the discovery process include:
- Document Requests: Your attorney can demand specific financial documents relating to marital and separate assets. This may include financial statements, tax returns, account records, and tax returns.
- Interrogatories: Also called requests for admission, interrogatories are a legal way to request information directly from your spouse. Your spouse must answer questions on interrogatories truthfully, or there are legal consequences.
- Deposition Testimonies: In a deposition testimony, you, your spouse, and both your attorneys are questioned under oath in front of a court reporter. Spouses are required to answer questions asked by the other attorney under oath. A deposition is most effective when you already have financial information to work with, and your attorney has specific questions regarding those documents.
The discovery process is an effective way to find out if your spouse is hiding assets. During discovery, the court can enforce your spouse’s compliance with the process.
FAQs
Q: How Do I Prove That My Spouse Is Hiding Assets?
A: If you have legal access to your spouse’s separate financial documents and your marital financial information, you can analyze this information for evidence of hidden assets. Certain documents can show finances that don’t add up or have been transferred, such as:
- You and your spouse’s last few years of tax returns
- The last several years’ bank account statements
- Retirement, insurance, and card account statements
- Any bills and receipts
If you are unable to see this information legally, begin working with your attorney for other legal ways to find this information.
Q: What Happens If a Spouse Is Hiding Assets?
A: If spouses are together, it is not necessarily illegal for one party to hide assets. There may be criminal charges for a spouse who has been hiding assets from their spouse during the divorce process. In addition to potential fines or jail time, hiding assets will be factored into the divorce proceedings. A judge may rule in the other spouse’s favor and allow inequitable distribution if a spouse has been discovered to be hiding assets.
Q: How Do Spouses Hide Assets in a Divorce?
A: There are several ways a spouse could hide assets. This may include:
- Giving gifts, loans, or paying debts to friends and family members, who will return them after the divorce
- Paying off debts to unknown third parties
- Transferring assets into a business and/or undervaluing a business
- Transferring funds out of marital accounts
These are only a few methods that a dishonest spouse may use.
Q: How Can I Protect My Finances in a Divorce?
A: The most effective way to protect your financial interests during a divorce is with an experienced divorce attorney. Missouri is an equitable distribution state, meaning that marital assets are divided depending on what the court considers fair, not equal. Having an attorney argue your interests in court can ensure that you get your fair share of assets. It’s also important to protect your own separate assets and determine how to protect shared accounts if you think your spouse will act irresponsibly or dishonestly.
Q: What Is the Ideal Way to Hide Assets in a Divorce?
A: It is illegal to hide shared assets during the process of divorce or lie about separate assets that you have. Hiding assets can result in criminal penalties. The judge ruling on the divorce process may also consider it to be misconduct. This would be a reason to grant your spouse a greater portion of shared assets.
Contact Stange Law Firm
If your spouse is hiding assets during a divorce, you need to know the legal steps you can take to protect your rights. Contact Stange Law Firm for your Springfield divorce.
