Posted on behalf of Jeffrey N. Greenblatt of Joseph, Greenwald & Laake, PA
Both spouses are required to disclose all assets, which includes income, expenses and debt, during divorce. Despite the legal requirements for spouses getting divorced to follow this guideline, more spouses are hiding assets during their divorce.
One-third or 31 percent of couples in the U.S. admitted to lying about their assets, according to the National Endowment for Financial Education. The study found that almost 58 percent of couples with combined assets said they hid money from their spouse. Thirty percent said they hid a bank statement or bill from their spouse and an additional 34 percent said they lied to their spouse about finances, debt or money they’ve earned.
Hiding assets can be a significant issue during divorce settlement negotiations. During divorce proceedings, each spouse is required to sign a court document stating that he or she is telling the truth about his or her finances and debt to the best of his or her knowledge.
Despite these requirements, more spouses getting divorced are attempting to hide their assets to keep more martial property or assets for themselves once the divorce is finalized.
Below are the most common ways spouses hide assets during divorce:
- Hide, understate or undervalue certain marital property
- Overstate debts
- Report lower income
- Report higher expenses
It is important for spouses getting divorced to understand the rules regarding asset division and the impact hiding assets may have on their divorce settlement. A divorce attorney can help individuals getting divorced go through their finances and make sure that their spouse is not hiding assets during the financial settlement.
Source: Forbes, “What Are the Consequences Of Hiding Assets During Divorce?” Jeff Landers, Nov. 14, 2012