In a divorce case, a spouse may take drastic action to gain an advantage during negotiations or litigation over matters such as equitable distribution and spousal or child support. When a spouse conceals assets before or during a divorce, their actions can significantly impact the resolution of property division or support. As a result, spouses getting divorced should understand what kinds of assets their spouse might hide, the red flags for hidden assets, and what steps they can take to uncover hidden assets or income.
Common Types of Hidden Assets in Divorce
Some of the most common examples of hidden assets in divorce cases include:
- Undisclosed bank or brokerage accounts
- Undervalued business interests due to fake expenses or loans
- Real estate hidden in shell corporations or under other people’s names
- Undisclosed retirement accounts, pensions, or equity compensation (e.g., stock options or restricted stock units)
- Cryptocurrency and digital assets
Warning Signs of Hidden Assets
When a marriage heads for a divorce, spouses should keep an eye out for red flags that can indicate that a spouse has hidden assets or income in anticipation of divorce. Common warning signs include:
- Sudden changes in financial behaviors, such as moving money out of joint accounts or making large, unexplained withdrawals
- Monthly statements for new bank, credit card, or brokerage accounts start arriving at the house
- Financial documents go missing, such as monthly statements, tax returns, or property deeds
- Sudden increases in contributions to retirement or pension accounts
- Unexplained debts or purchases
- Decreased or skipped contributions to joint family accounts
- Sudden changes in a spouse’s business, such as new loans or claimed operational losses
Consequences of Hidden Assets in Divorce
Hidden assets can have significant financial consequences for a divorce proceeding, as the spouse who hid income or assets may receive more than their fair share of the marital estate under equitable distribution principles or may have a lower spousal or child support obligation than they should. The other spouse and the couple’s children may also receive less than what is owed to them under the law. However, when the other spouse and the court discover hidden assets, the at-fault spouse may face various financial and legal consequences, such as:
- Civil contempt of court
- Monetary sanctions, including an obligation to reimburse the other spouse for legal fees and other costs incurred to uncover hidden assets
- A less favorable property division or a higher spousal support obligation
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In extreme cases involving criminal fraud or perjury, a spouse who hides assets may also face criminal prosecution and punishment in the event of a conviction.
Legal Tools and Methods for Finding Hidden Assets in Michigan
When a person suspects their spouse may have hidden assets or income leading up to divorce, they have various strategies they can pursue to track down those assets, such as:
- Discovery – During divorce litigation, spouses must make complete financial disclosures to each other and the court. Spouses can also submit discovery requests to obtain additional documents or information.
- Court-Ordered Disclosures – Courts may also order spouses to supplement their financial disclosures if they find that a spouse has submitted inadequate or contradictory information.
- Forensic Accounting – A spouse who suspects hidden assets may retain forensic accountants, who can locate and trace hidden assets back to the marital estate by reviewing various financial transaction documents.
Contact a Divorce Attorney Today
When you or your spouse has filed for divorce, having experienced representation can help you protect your financial rights and interests. Contact The Smith Law Offices, P.C., today for a free, confidential consultation to discuss your legal options for dealing with your spouse’s hidden assets when resolving economic issues like property or spousal and child support in divorce.
