Penalty for Hiding Assets in a Divorce

By Jennifer Kiesewetter, J.D.

Penalty for Hiding Assets in a Divorce

By Jennifer Kiesewetter, J.D.

If you're thinking about getting a divorce, you may worry about how the court will divide your assets, including your money and property. If you have more assets or make more money than your spouse, you may consider hiding your assets, so not as much property or money will go to your soon-to-be ex.

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No matter what, hiding assets is a terrible idea. If you hide assets, and they are later discovered, the court can issue penalties or jail time for your actions.

Reasons for Hiding Assets

A common goal for hiding assets in a divorce proceeding is to prevent the reduction of your assets. In a divorce, the court will divide a married couple's money and property. Each state has different rules for this division.

For example, in community property states, like California or Texas, the law requires an even split of assets upon divorce. This includes any assets that you had before the marriage that you blended, such as transferring your individual checking account balance to a joint account, and any assets you acquired together during your marriage. If you had property before the marriage and keep that asset separate without commingling it, then the court will not divide that asset in your divorce.

Other states are equitable distribution states. In these states, the law requires that the court divide up assets equitably, or fairly. So, depending on the state's laws and your situation, the court may not award a 50-50 split of all assets. For example, the court will examine your employability and the length of your marriage.

A court considers your assets not just for property division, but also as a basis for alimony or child support. That's why one spouse may want to hide assets—so they can pay a lesser amount in either spousal or child support.

How to Uncover Potential Hidden Assets

If you think your spouse is hiding assets, you have a couple of options. In contested divorce proceedings, discovery must occur. In discovery, both spouses produce requested documents to their lawyers and potentially to the court. For example, you'll provide your pay stubs, bank statements, retirement plan statements, the deed for your home, information on your cars, information on your debts, among other documents. Through discovery, your attorney may locate certain assets that your spouse attempted to hide.

Further, if your spouse doesn't produce certain documents during discovery, you can subpoena them for those documents. Your spouse must provide the requested documents under subpoena or face penalties from the judge.

Additionally, your attorney may depose your spouse, meaning your spouse must answer questions under oath. If your spouse lies about specific assets, then they can face penalties. Your spouse also may be called to testify in court, which is also under oath. If the judge orders your spouse to produce documentation on specific assets, and your spouse does not, then the judge could issue fines or jail time for failing to comply with the court order.

Finally, if none of the above uncover suspected hidden assets, you can employ an investigator to follow your spouse. The investigator may determine where or how your spouse is hiding assets.

If you're going through a divorce and you suspect that your spouse is hiding assets, you may consider hiring an experienced family law attorney to help you uncover these assets. Since divorce proceedings can be complex, it's best to team up with someone who's on your side.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.

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