Hiding assets is common during divorce

February 09, 2013 (Press-News.org) Hiding assets is common during divorce

Article provided by Law Offices of Victoria S. Linder
Visit us at http://www.sacramentoattorneys.net/

California residents know divorce is complicated. It is even more difficult when one spouse attempts to hide assets during the divorce process.

Unfortunately, lying about assets is more common than most people think. According to the National Endowment for Financial Education, 34 percent of adults in the United States admit to lying to a spouse about finances or debt. Additionally, over half admit to hiding a minor purchase from a spouse.

If a divorce settlement offer seems low, it is possible that a spouse is not disclosing all of his or her assets in an attempt to avoid having to divide them. Fortunately, there are several ways to discover potentially hidden assets.

Methods to discover hidden assets

There are many ways to discover assets that one spouse may be hiding during a divorce. First, it is a good idea to acquire copies of all bank statements during the divorce discovery process. These can be reviewed for any unrecognizable major purchases that indicate one spouse may have bought an asset that hasn't been disclosed. It is also important to watch for hidden accounts, as a spouse may use them to hide substantial purchases or expenses.

Looking over tax returns is another good way to discover hidden assets. Lying to the Internal Revenue Service is more difficult than lying to a spouse. If you don't have copies of tax returns, copies of tax returns are provided free by the IRS. It is a good idea to obtain copies for the past five years and look for any suspicious activity.

It can also be useful to check all current credit reports. If any inconsistencies or questionable items are found they deserve additional examination.

Spouses could also engage the help of others to hide extra cash. Money is frequently "loaned" to a friend or family member who pays it back once the divorce is final.

Employers could also assist a spouse in attempting to hide assets or money. A manager may agree to postpone certain bonuses or promotions until after a divorce is final. If a spouse is a business owner, he or she may pay "salaries" to employees who are on payroll in name only. When the divorce is final, the name goes off the payroll and the money is returned.

Penalties for hiding assets

If a spouse is caught hiding assets during a divorce he or she could face serious consequences. Hiding assets is considered lying under oath and this charge comes with strict penalties. A spouse who hides assets could be held in contempt of court. In some cases, a spouse may be forced to pay costs and attorney's fees for both parties. The entire case also faces dismissal, which forces both spouses to start the entire process over. The court also has discretion to impose more severe sanctions, even including jail time.

One California case illustrates the imposition of a particularly harsh penalty. A woman neglected to reveal winning $1.3 million in the California State Lottery. She won the money just 11 days before filing for divorce. California is a community property state, which means all earnings are divided equitably. This entitled the woman's husband to half of the lottery earnings. However, because she did not disclose the earnings, the judge awarded the entire amount to her husband.

An individual who suspects a spouse of hiding assets can benefit from speaking to an experienced divorce attorney. The attorney can provide knowledge and assistance and help discover hidden assets.