Problems Involved with Hiding Assets during a Pennsylvania Divorce
Provided by HG.org
During divorce, spouses may try to protect their assets from division by hiding them from the other spouse. This may be easier if the spouse has handled the couple’s finances for most of the marriage and the other spouse is unaware of the true extent of the marital estate. However, hiding assets during the divorce process can lead to significant consequences to all parties involved.
How Property Is Divided
States primarily use one of two models to determine how to divide property between spouses. The first is community property. This model generally requires that each spouse is entitled to 50/50 ownership in all property earned or acquired during the marriage. Only a handful of states use this model.
The other model is equitable distribution. Under this model, the court seeks to equitably divide the couple’s property between them. This does not necessarily result in an equal distribution of the property between the parties. Pennsylvania uses this model.
Reasons to Hide Assets
People may hide assets for a variety of reasons. They may think that they need more assets or income in order to support themselves after the divorce. They may think that the other spouse does not have a right to the asset because it was a gift or something that the spouse considered his or her own property, regardless of the law. They may think that the other spouse wanted the divorce and should not benefit from their asset. The other spouse may have caused harm during the marriage through abuse, infidelity or drug use, and the spouse may think it is only fair that he or she have more assets. Ultimately, spouses who hide assets put their own interests ahead of what is legal under the circumstances.
In many divorce cases, spouses may provide financial disclosures to each other. These are affidavits in which the spouses indicate the extent of their income, assets and debts. If spouses lie on these forms, there may be consequences, including the judge making rulings against them, ordering hidden assets to go to the innocent spouse or allowing the case to be reopened after divorce to fairly distribute the assets.
Signs of Hidden Assets
There are many signs that assets are being hidden during a divorce. Money may start going missing. Bank account balances may be depleted. Bills may be unpaid. New contracts may be secured, such as storage units or a lease on a new apartment. Mail may come into the home from unknown sources. A spouse may stop participating in a joint bank account and may open his or her own. A spouse may be evasive about financial matters.
Finding Hidden Assets
If a spouse suspects that his or her spouse is attempting to hide assets, it is important to quickly respond to this information. There are often a number of ways to uncover the existence of these assets and that they are being hidden. One basic way to find assets is to search online under the spouse’s name. This search may pop up surprising results, such as an affair that is currently occurring and resulting in a waste of marital assets. The spouse may also want to review the other spouse’s social media profiles for indications of recent purchases or an affair. Searching the Secretary of State site can uncover business holdings. A search of the tax assessor’s site may include a listing of personal property and real property under a person’s name. A spouse can see if there are assets on these sites that are not included in the financial disclosure.
Spouses may also want to review tax returns for possible implications of unknown assets. The spouse may be receiving income from the asset which is reported on the tax return. Spouses can typically request copies of tax returns from the IRS. A spouse may also be hiding assets within his or her business.
Other spouses may purchase luxury items and never reveal them to the other spouse. Looking through paperwork in the home may help reveal the existence of these assets. Another common way to hide assets is to give them to other people to hold onto until after the divorce. A spouse may even “lend” a family member money and then neglect to include this loan in the financial disclosure. A forensic accountant may be able to find hidden assets.
If you think that your spouse is hiding assets from you, contact an experienced Pennsylvania divorce lawyer for assistance.
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.