Why you shouldn't play hide and seek with assets during divorce
Posted by Thomas Pettinicchi of D'Amico & Pettinicchi, LLC on Nov 15, 2012 in High Asset Divorce
For adults who are going through a divorce, there may be an instinctive desire to be protective over money, property, children and the future. This instinct, while common, can end up working against a person if he or she is not careful. In many high-asset divorces that involve a number of bank accounts, investments, properties, and sources of income, many spouses will try to hide money or assets in an attempt to protect themselves.
People may think that hiding this bank account or overstating debts and expenses is not that big of a deal, especially if they can hide it until a divorce is finalized. The harsh reality, however, is that hiding assets during the divorce process can result in serious consequences, even if it discovered much later.
When couples go through a contested divorce, they are required to sign a Financial Affidavit. When signed, this legal document is essentially a promise that a person has been truthful in the full disclosure of his or her assets. If a person lies in the document, as more than 30 percent of adults have, he or she can wind up paying extremely high penalties and may even end up in jail.
There are several pieces of anecdotal evidence that highlight these consequences. After it was discovered that a woman had failed to disclose the fact that she had recently won $1.3 million in the lottery during her divorce, a judge ordered her to pay every cent of the winnings to her ex-husband as punishment. In another case, a man purposely hid assets until after the completion of his divorce. However, when the assets were discovered afterwards, a court revisited the original settlement and ultimately awarded all the hidden assets to the ex-wife.
Hiding assets and protecting yourself in a divorce are two very different things. A person has every right to be concerned about how their assets will be divided in a split, but lying or hiding assets is not only devious, it is against the law as well.
Source: Forbes, "What Are the Consequences Of Hiding Assets During Divorce?" Jeff Landers, Nov. 14, 2012