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How can hidden assets affect property division during divorce?

On Behalf of | May 30, 2024 | Property Division

People often expect property division to be a technical or largely mathematical process. Contrary to that widely-held assumption, asset division during a divorce can be a very lengthy and complex process. Dividing assets evenly is not always necessary or even the best approach to property division. Many couples have to look carefully at their personal circumstances and marital property to find appropriate property division solutions.

Typically, both spouses must put together an inventory of assets and financial obligations which they submit to one another and the courts. A review of those records can help people determine how to fairly divide their marital property with each other. Unfortunately, some people take that opportunity to misrepresent their finances by hiding assets.

What impact can hidden assets have on divorce proceedings?

Spouses can only negotiate based on the information they have available, and the same is true for a judge making property division choices. If people are not forthcoming about their personal holdings, a judge could divide the property in a way that is not fair. Someone who is unaware of the full extent of their marital estate might also accept a property division settlement that is not reasonable or appropriate.

It is, therefore, crucial for those preparing for divorce to review financial records carefully. Both household financial documents and the inventory of assets provided by a spouse can help someone begin looking for hidden assets.

Those who discover hidden assets can factor that into their negotiations. In some cases, judges might hold a spouse accountable for misrepresenting their financial circumstances and hiding assets in an attempt to unfairly retain more of the marital estate than they actually deserve.

The discovery of hidden assets during the divorce process can lead to a judge awarding more of the marital estate to the other spouse as a punishment for financial misconduct. Those who discover hidden assets after a divorce may sometimes be able to appeal the original property division ruling by proving the misconduct on the part of their spouse.

Uncovering hidden assets is often the first step toward pursuing true economic justice during property division proceedings. Those who take the time to look at their financial circumstances carefully with the assistance of a skilled legal team can better protect themselves from hidden assets and other forms of economic misconduct that frequently occur during divorce.