Hiding Assets? Not So Fast….

Somebody going through a contentious divorce can be very unpredictable. A person with a combative and calculating personality can make a divorce proceeding extremely unpleasant and difficult for all involved, including the courts. It is not uncommon for somebody like this to file orders of protection without merit, relocate children without consent, hide assets and underreport income. Liquid assets are often placed in foreign bank accounts, put into questionable investments or squandered. Once these funds are gone, they are unavailable for consideration during equitable distribution.

Hidden assets and income affect the victim spouse when a court is deciding an appropriate property division, maintenance and child support.  If a spouse hides or wastes income and assets, the victim spouse will not have the entire marital pot available for division by the court.  Instead, the victim spouse can only receive an equitable share of the diminished pot.  When this occurs, how can a court provide a remedy to a victim spouse?

In equitable distribution, the court maintains discretion over the degree and nature of the penalty imposed for failure to comply with disclosure orders. In some cases, after it has been determined that income and assets were hidden or wasted in contemplation of divorce, the court can decide that unequal distribution of marital assets is warranted by the egregious economic misconduct. Although this method provides the victim spouse with some redress, the victim spouse is never truly whole, since the award is being apportioned from a distorted marital pot.

Moreover, it has to be established that assets and income have been secreted and concealed for a court to order unequal distribution.  … <Read More>