What Happens if a Spouse Hides Assets During a Divorce?
When discussing martial property and division of assets, the first thing to know is that Nevada is a community property state. So, therefore, any assets, as well as any debts that are incurred or are gathered during the time of the marriage are considered part of the community estate and therefore equally divided by both parties. So, both parties have an equal interest in any assets that are gathered or accumulated during the marriage.
How Assets Can Be Hidden
With this being the case there are some spouses out there who feel that they do not want to share equally in the assets of the community, and so, therefore, they will attempt to hide certain assets. A spouse can hide assets in a few ways:
- By emptying out bank accounts
- By deeding property over to another person during the time of the divorce
- By spending a lot of money right before the divorce and purchasing high ticket items that they then plan on selling after the divorce is final to recuperate that money.
- By deflating Income
For example if the spouse is self-employed that spouse can doctor the books and under report the earnings of the business, or if that spouse works for a family business or for a very good friend they can have the person writing the checks write them a lesser amount or possibly withhold a bonus that is due until after the divorce has been finalized, so they don’t have to divide that money with their spouse.
These attempts at hiding assets, of course, make for unequal distributions of assets and also have an effect on the amount of money that is ordered by the judge for things such as spousal support or for child support – two things that are related directly to the income of the spouses. What you can do if you are the spouse who is questioning whether or not your spouse is hiding assets is you can either hire a private investigator or hire an accountant. These two approaches are costly and sometimes are not worth the expense if the assets are not valued at a high amount.
Do Your Due Diligence
What I generally tell my clients is if they are fearful that their spouse is either hiding assets or is thinking about hiding assets prior to the divorce or during the divorce process is to do their own due diligence. What I mean by that is go around your house and take pictures. Take pictures of all the assets. Take pictures of everything that you can. All the furniture, the backyard, the front, the garage, anything that you have that you feel is part of the community.
For example, an item(s) that may be of great value may be tools in a garage. I know that one of the spouses might not know exactly the value of the tools, but in that situation just take pictures so that you have copies, you have proof of the tools that were out there, and later on, we can figure out the cost or the value of those tools.
Also, take information down as to bank accounts and account numbers. This is for credit cards, investment properties, 401(k)s, stocks, bonds, anything that you know that you guys have as a couple that you put money into. Write down all of the information that you can so when the time comes if a certain asset is hidden you already know that it was existing because we had proof of it. So, take pictures, take notes, and write down all of the information.
Repercussions of Hiding Assets
On the other hand, if you are the spouse who is hiding assets because you feel that the asset is yours by right and you should not have to share it with your spouse, I caution you to be aware that you can possibly have monetary sanctions imposed on you by the Court, so just be sure that the assets that you’re trying to hide are going to be worth it, that they’re not going to cost you more than the assets are really worth.
Another thing that a judge can do to “punish” you so to speak for trying to hide assets during a divorce is they can go ahead and order that all of the assets remaining be given to your spouse as a punishment for you trying to hide assets. Also, they can impose higher payments on your child support or your alimony in order to cover the money that you got away with not sharing by hiding assets or selling off assets or something to that effect. So, it can have a detrimental effect on you if you try to hide assets.
If you are concerned your ex-spouse may be hiding assets, contact our office today or schedule a consultation online.
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