Could your ex be hiding assets in a business?

On Behalf of | Jan 28, 2021 | Property Division

Divorce is a stressful and emotional experience; it is also a financial one. This fact can be frightening, particularly for someone who was economically dependent on a spouse during marriage.

One fear that people in this position might have is whether the other person is hiding assets to shield them from division. To protect yourself and the fair settlement you deserve, you should know where to look if you are concerned about hidden assets.

Using a business to conceal assets

When a divorce involves a business owner, dividing property can be exceptionally complicated. Businesses are far more complex than other assets in terms of valuation and ownership. And unfortunately, some parties take advantage of this complexity by using a company to hide property.

There are several ways someone might attempt to do this. They might:

  • Make fake transactions
  • Undervalue the business
  • Misrepresent their stake in a company
  • Conduct business “off the books”
  • Shift money to undisclosed bank accounts
  • Prepay employee benefits
  • Overpay business taxes
  • Selling business assets for less than they are worth

An individual without legal or financial experience navigating these situations can find it all but impossible to track down money concealed this way. This is why it can be critical to consult your attorneys and financial professionals when dividing assets.

Other ways parties hide assets

In addition to using a business to conceal property during a divorce, unscrupulous parties might also:

  • Shift marital money into a secret bank account
  • Hide cash or valuable items in a safe deposit box
  • Give money to a friend with the understanding that they will return it after the divorce
  • Purchase items that can easily be undervalued

These tactics are less sophisticated than using a business to hide assets, but they are still wrong.

Protecting yourself and your settlement

No matter how a person attempts to conceal property during a divorce, doing so is illegal. It can result in criminal charges and financial penalties for the party withholding or misrepresenting information during a divorce.

Thus, it is crucial to be honest and forthcoming when disclosing financial information. And having an attorney and a forensic account on your team can help you protect yourself and the settlement you deserve.