Hiding assets prior to divorce is a bad idea
If you are considering a divorce, you might be wondering how your finances and assets will be shared or distributed. If you own several assets, you might be tempted to hide those assets from your marriage partner, particularly if you are mad at your partner or if you strongly believe that you toiled for the assets and deserve to own them all alone. However, regardless of how tempting it may be, hiding assets prior to a divorce is a bad idea and it can land you in big legal trouble.
Community property and equitable distribution
The main reason why spouses want to cover up their assets prior to a divorce is that the law stipulates a division of marital assets when the spouses divorce. In community property states, all marital property are divided on a 50-50 basis, which includes all assets obtained by either spouse throughout the marriage union. Pre-marital assets, which are assets owned prior entering the marriage union are not encompassed in a community property split except if you mixed them up or co-mingled with marital property.
For instance, if you had $100,000 in your personal bank account before the marital union, it is yours. However, if you transferred that $100,000 into a joint bank account holding matrimonial funds and then used it to purchase or refurbish a home, you have actually mixed the funds and the divorce court will consider that marital property. Inheritances, personal gifts awarded during the marital union, and compensation judgments from personal injury lawsuits all remain protected from being split unless co-mingled with marital property.
In equitable distribution states, marital assets are split fairly or equitably based on the duration of the marriage and each partner's contributions in determining what share each spouse gets. Each partner is entitled to a portion, but not necessarily half.
Why you should not hide assets
In almost all states, there's a legal process referred to as a discovery, which acts as a means for divorcing spouses to collect information from each other and other involved parties, such as employers, banks and the like. The discovery period will see each spouse reveal to each other their financial information. All your asset declarations will be done under oath. If your spouse or their divorce lawyer finds out that you've been hiding any assets, you may face hefty monetary fines or a perjury charge.
Additionally, if you fail to provide financial details or reveal all your assets to your divorcing spouse, the divorce court can actually order you to do so. Failure to follow the court order may amount to contempt of court, which may mean a prison sentence.
Rather than hiding assets, hire the legal services of a good divorce attorney. Your attorney can help you get a reasonable divorce settlement and protect your assets and interests.