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Dealing with hidden assets in a high-asset divorce

On Behalf of | Apr 9, 2024 | High-Asset Divorce

When substantial assets are involved, divorce proceedings can be complex, challenging and highly contentious. One spouse may hide assets, which impacts the equitable division of property.

However, hiding assets during a divorce is unethical and illegal, as it can leave one spouse without their fair share of the marital property and put their financial security at risk.

Recognizing the signs of hidden assets

Several methods can be used to conceal wealth. Here are some common strategies used to hide assets:

1. Underreporting income, which can involve manipulating pay stubs, delaying bonus payments or deferring salary increases to give the appearance of lower earnings.

2. Inflating debts or liabilities can artificially reduce a spouse’s net worth on paper. By exaggerating mortgage obligations, loans or other liabilities, individuals may try to provide a false picture of their financial standing to diminish the assets subject to division.

3. Deliberately undervaluing real estate, business interests, artwork or collectibles, can obscure their true worth. By obtaining low appraisals, forging valuation reports or misrepresenting the market value of assets, spouses may attempt to minimize the assets available for distribution.

4. Converting cash into untraceable forms, such as cryptocurrency, precious metals or offshore accounts, can make it challenging for the other spouse and legal authorities to trace and account for these assets.

There are red flags to watch out for that may indicate your spouse is attempting to hide assets:

  • Sudden changes in financial behavior or lifestyle
  • Unexplained withdrawals or transfers of funds
  • Discrepancies between reported income and lifestyle expenses
  • Complex financial transactions that lack transparency
  • Reluctance to provide full financial disclosure or missing documentation

If a spouse is uncooperative or refuses to disclose relevant financial information, seeking court intervention may be necessary. By petitioning the court, spouses can ensure a more transparent and equitable resolution of the divorce proceedings.