Divorce is not only the end of a romantic relationship, but also that of a financial relationship. Courts use financial information from both spouses to make decisions about spousal maintenance, child support, property division, and more. Although everyone handles divorce differently, there are some mistakes that should be avoided at all costs.
Hiding assets or attempting to misrepresent your financial circumstances is one of these mistakes. Artificially deflating your income, failing to report a piece of real estate, transferring money between accounts, not reporting a source of income, or otherwise distorting your financial status can result in penalties, money sanctions, and a more problematic divorce. In order for a divorce to go as smoothly as possible and to avoid negative consequences, it is critical that both spouses are honest regarding their finances.
Hiding assets during a divorce may not be as obvious to spot as one may suspect. There are many tactics that spouses use to misrepresent their financial circumstances. A spouse who is attempting to fake their financial status may:
- Overstate debts;
- Transfer real estate property out of his or her name by signing the deed over to someone else;
- Hide valuables such as art or antiques at a friend or family member’s house;
- Withdraw money from his or her bank account(s) and hide it in someone else’s safe deposit box;
- Make large purchases with the intent of reselling the item after the divorce is finalized;
- Manipulate business ledgers of a self-owned business in order to appear to make less money;
- Overpay the Internal Revenue Service;
- Take cash withdrawals on debit cards at places like grocery stores or shopping malls; or
- Underreport or hide employer retirement accounts or stock options.
Penalties and Consequences of Hiding Assets
If a person is found to be hiding assets or lying about finances during a divorce, he or she is at the mercy of the judge presiding over the divorce. The judge can impose sanctions, or monetary penalties, that the untruthful spouse would be required to pay. A judge also has the authority to force a spouse to give up his or her share of a remaining asset to make up for the assets he or she lied about. If a person continually attempts to hide assets during a divorce, he or she can even be held in contempt of court, the penalties for which could include confinement.
A Law Firm Dedicated to Our Clients
If you are getting divorced or have further questions regarding hidden assets, contact the knowledgeable Kane County family law attorneys at Bochte, Kuzniar & Navigato, P.C.. Our highly-skilled legal professionals are ready to help you end your marriage as effectively as possible. Contact our law office by calling 630-377-7770 for a confidential consultation today.