In a New Jersey divorce, both spouses are legally required to disclose all of their assets. But sometimes spouses try to get away with hiding assets. They may do it because they want to get a better financial outcome than their spouse, against whom they hold bitter feelings. They might want to hold onto an asset because of a sentimental attachment to it. Or they may believe the asset is rightfully theirs because they had it before the marriage and believe it should not be subject to equitable distribution. In the latter case this could well be true, but it is up to them to prove this to the court, not to dishonestly hide the property.
Generally speaking, it is extremely difficult these days to hide assets in such a way that the concealment cannot be discovered during the divorce process. If you suspect your spouse is hiding assets in your divorce, there are a number of ways to find out the truth to make sure you receive your equitable share of marital property in your divorce. But before we discuss how to find assets in a divorce, let’s look at the penalties for hiding assets in a divorce in New Jersey.
Penalty for Hiding Assets in a Divorce
Intentionally hiding assets in a divorce can lead to serious consequences. Consequences and penalties could include:
- Prison or jail time
- Loss of credibility in court
- Payment of attorney fees for the spouse (or former spouse, if the asset concealment was discovered following divorce)
- Having to give the asset or value of the asset to the spouse.
Sometimes people suspect their spouse of hiding assets, so they may decide to do the same to get even or to get their share. But hiding assets is never worth the consequences. Don’t do it, even if you believe your spouse is concealing money or property from you. Instead, put your energy into finding assets you believe are being concealed by your spouse and holding him or her accountable.
How to Find Assets in a Divorce
Fortunately, there are a number of different methods for uncovering hidden assets in a divorce. Here are three steps to doing so:
- Determine what your spouse is hiding.
- Assess the family’s cash flow.
- Use the discovery process to your advantage.
The lengths to which you and/or your divorce attorney will need to go will depend upon the lengths to which your spouse has gone to conceal the assets. Most spouses who attempt to hide assets make mistakes, and this usually simplifies the process of uncovering their unlawful nondisclosure.
Determine What Your Spouse Is Hiding
One of the first steps in uncovering hidden assets in a divorce is to determine what it is that your spouse is hiding. Often, spouses will have a general idea or suspicion that the other spouse is withholding financial information, but they will not know exactly what information is being withheld.
Some of the types of assets that spouses tend to try to hide include:
- Bank, investment, and retirement accounts
- Rental property
- Investment property
- International property
- Cash (such as tips or revenue from selling personal property)
- Deferred compensation
- Physical assets
- Artwork or art collections
- Oriental rugs
- Coin collections
- Summer home(s)
- Gifts from parents
- Small business income, inventory, and equipment.
In addition, in some cases spouses may ask their employers to delay bonuses; they may use business income to purchase high-value assets for the office; or they may even falsify payments to non-existing contractors or employees.
Assess Your Family’s Cash Flow
In many cases, spouses’ attempts to hide assets or income can be uncovered using the family’s bank statements and financial records. Reviewing your records may reveal information such as:
- A sudden and unexplained reduction in your spouse’s income
- Cash withdrawals by your spouse
- Check and credit card payments that you do not recognize
- Tax payments or payments to a bank or storage facility for assets being hidden by your spouse.
If you have lawful access to your spouse’s business records, you can review the business’s transaction history and financial statements for abnormalities as well.
Use The “Discovery” Process To Your Advantage
As we mentioned previously, when going through a divorce in New Jersey, both spouses are required to voluntarily disclose their pertinent financial information. However, this is not your only opportunity to use legal means to uncover your spouse’s attempts at concealment.
One of the earlier stages in the divorce process is known as “discovery.” During discovery, you are entitled to request information from your spouse that is relevant to your divorce, and your spouse is obligated to fulfill your requests (subject to certain legal standards). Third parties such as banks, retirement plan administrators and employers can also be compelled to provide records during the discovery process. Individuals who are familiar with your spouse’s business or financial affairs may be deposed during discovery to provide relevant information.
By using the discovery process strategically, not only can you seek to uncover information that is directly tied to your spouse’s concealment, but you may also be able to collect information that you can use indirectly (perhaps with the help of a forensic accountant or other financial expert) to track down hidden assets.
Hidden Assets Found after Divorce
What happens if hidden assets are found after the divorce is final? Do you have any legal recourse? The answer to this question is “maybe.” If you have strong evidence that your spouse concealed money, undervalued their business, had their employer delay a raise or bonus, or otherwise hid assets from you, you can ask the court to reopen your divorce case. New Jersey Rule of Court 4:50-1 describes grounds for doing so. If you are successful, you could potentially get a new property division judgement or an increase in spousal support that factors in the once-hidden assets.
Do You Suspect Your Spouse Is Hiding Assets?
Contact Our Experienced Bergen County Divorce Lawyers for Help
If you are preparing for a divorce and are concerned that your spouse may be hiding assets, a knowledgeable New Jersey divorce attorney can investigate for you and discover the truth. Or if you are already divorced and believe your ex moved money or devalued property or assets to hide them from you, we can also help.
The Bergen County divorce lawyers at Men’s & Fathers’ Rights Divorce Lawyers by Schultz & Associates, LLC have decades of experience assisting clients with all types of issues that arise in divorce, including those involving spouses who try to conceal property and assets. To schedule a confidential initial case evaluation at our offices in Hackensack, please call (201) 880-9770 or reach out online.