New Jersey is an equitable distribution state that divides a divorcing couple’s marital assets and liabilities based on what they deem fair, which does not necessarily mean a 50/50 split. Thus, courts require soon-to-be ex-couples to be forthcoming with their financial disclosures.
However, some spouses act in bad faith and hide assets from the other party, whether willfully or by mistake. Reasons for concealing assets may vary – out of spite, thinking they will enrich themselves while hurting the other party or anticipating that the judge’s final decision will not favor them.
Ultimately, especially in high-asset divorces, hiding assets tends to complicate an already contentious property division process.
Identifying risk factors
Hiding assets is a form of financial infidelity. In some cases, this breach of trust leads to divorce. Some classic signs indicating this toxic behavior are unexplained withdrawals, significant purchases, sudden changes in spending habits and evasive attitudes when asked about finances.
Depending on the circumstances and the judge’s assessment, the following are possible scenarios influencing the divorce:
- Underreporting income to reduce child support and alimony amounts
- Undervaluing assets to prevent a spouse from getting more than the offending spouse wants them to
- Misrepresenting the extent of a spouse’s involvement in a business to avoid splitting ownership or future earnings with them
A violating spouse must face the consequences. When they lose credibility, the court may ask them to pay the victim’s legal fees and award the actual value of their undisclosed assets as payment to the victim for the trouble they caused. They may also be subject to criminal fines and jail time.
Uncovering hidden wealth
If a victim suspects their spouse is intentionally hiding financial information, they must consult legal and forensic resources to help them obtain evidence. These professionals can work with them to establish their claim. They can investigate potentially questionable details or inconsistencies on bank statements, retirement accounts and income tax returns. Doing so can prevent further lies and protect their rights regarding divorce.