First and foremost, when going through a divorce, you should never attempt to hide assets from your spouse. In a contested divorce, the court must oversee property division, and one of the requirements is full disclosure of all assets the couple owns. Transparency and honesty are essential.
That said, it is possible that your spouse may try to hide assets from you. This is especially common in high-conflict, high-asset divorces. It is important to understand how this can happen so you know what red flags to watch for and how hidden assets may be uncovered to ensure fair property division.
Transferring money into someone else’s name
One potential tactic is transferring money or other assets to another person to hold on their behalf. For example, your spouse may claim they owe a large debt to a family member or close friend and then “repay” that debt using marital funds. In reality, the debt may be fictitious, and the third party may have agreed to transfer the money back after the divorce is finalized. This tactic temporarily moves assets out of your spouse’s name.
Undervaluing assets they own
Another tactic is disputing the value of assets during property division. For instance, your spouse may own a jewelry collection worth $20,000, but claim it is only worth $10,000. If you accept other assets worth $10,000 in exchange for your share of the collection, you may receive less than your fair share because the asset was undervalued.
Purchasing cryptocurrency
In modern divorces, some individuals attempt to hide assets by investing in digital assets, such as cryptocurrency. A spouse may purchase these assets without your knowledge and then fail to disclose a cryptocurrency wallet to the court. They may hope you are unaware that the assets exist or that you have a legal claim to them.
Deferring future payments
Finally, if your spouse works in an industry where compensation includes commissions, bonuses or raises, they may attempt to delay payment until after the divorce. Even though the income was earned during the marriage, postponing payment may be an effort to keep it out of property division.
Your legal options
Hiding assets during a divorce is not allowed, but it does occur. If you believe your spouse may be attempting to do so, it is critical to understand all of your legal options at this time.