Ways Your Spouse Can Hide Assets in a Divorce

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Going through a divorce is difficult enough, but when you suspect your spouse of hiding assets, it can make the process even more complicated and frustrating. Your marital property, which includes all assets and debts that you have acquired during your marriage, should be divided fairly between both parties. Unfortunately, there are many divorce cases where spouses try to unfairly influence the property division process by concealing money or other valuable assets. Here are five common ways spouses may try to hide assets during divorce, as well as some tips on how to uncover these issues:

Offshore Accounts

One of the most common—and difficult to track—ways people hide assets during a divorce is by transferring funds to overseas accounts. Since these accounts are outside the jurisdiction of the United States, you may be unable to determine their balances, or even whether they exist at all. However, with the help of a forensic accountant or other financial experts, you may be able to uncover improper transfers to these accounts from sole or joint domestic accounts, and your attorney can make sure these issues are addressed correctly during the divorce process.

Transferring Property to Others

In many cases, spouses will attempt to conceal assets by transferring them to others, such as friends, family members, or business partners. They may claim that they are paying back a debt that is owed or making payments for other reasons, but they will plan to have the other person transfer the assets back to them once the divorce is completed.

Concealing Money In A Business

A spouse who is a business owner may take a number of actions to use their business to conceal assets. They may misreport the value of business assets, delay major business deals until after the divorce has been finalized, or claim that personal assets are actually assets owned by the business. A business owner may also pay a salary to a nonexistent employee so that they can funnel funds into a hidden account. A forensic accountant can review a business’s books and uncover these types of issues.

Cryptocurrency

Virtual currencies such as Bitcoin are becoming an increasingly popular method of hiding assets. These currencies can be difficult to track, since they are often held in private digital “wallets,” and a spouse may fail to disclose them during the divorce process. However, they may be uncovered with the help of financial experts who can review transfers from bank accounts to determine when cryptocurrency purchases were made.

How Assets Get Divided in Michigan Divorce

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The Shaw Law Firm  | Divorce

Under Michigan divorce law, most property acquired during a marriage is considered to be “marital property”.   If the parties get divorced, the court will generally divide marital property equally between the two parties.

Factors considered in the distribution of assets

If one party does something to waste or dispose of marital assets before filing,  the court may award the other spouse a more significant portion of the remaining assets. This might happen if one spouse liquidated an investment account to cover a gambling debt.

If the earning potential of one spouse is greater than the other, the court may designate a more significant portion of marital assets to the spouse that earns less. This is particularly likely if the lower-income spouse has custody of the children from the marriage.

Separate property

Some types of property obtained by spouses during the marriage are separate and are not subject to equitable distribution, such as an inheritance, if the receiving party has kept the inheritance separate.  The receiving spouse would have to maintain the asset as individual property and not comingle it with other marital property.

If a spouse can show that they owned a particular property before the marriage, they can ask the court to exempt these assets from any property distribution. Determining the distribution of assets in a divorce is a complex process. The type of assets and position of each party in the marriage are important factors.