Hidden assets during the process of divorce can have a severe effect on the other spouse if the assets are not discovered. It can even result in significant financial hardship. Hiding assets is illegal, but many spouses, particularly those in high-asset divorces, engage in it. If you are concerned that your spouse is hiding assets, it’s essential that you have a Lincoln, NE, divorce attorney to defend your interests and help you navigate formal discovery.
Spouses may hide assets for many reasons. Sometimes, there are genuine fears of financial instability, or there is a sentimental connection to a specific asset they do not want to lose. In other cases, spouses hide assets vindictively as a way to get back at their spouse and ensure that they have less money after divorce. When the court discovers that a spouse has purposefully hidden assets, that spouse may face civil and even criminal penalties. An attorney is crucial to help you discover these assets.
What Do Hidden Assets Affect?
When one spouse hides assets, whether those are marital or separate assets, it significantly affects the division of marital property. Marital property is any assets and debts obtained by a couple throughout their marriage, with some exceptions. Separate property is any assets or debts that spouses had prior to the date of marriage. The appreciation of separate property is considered marital property.
The value of separate assets and the amount of marital assets are important, whether a couple negotiates their separation or litigates it. In litigation, Nebraska family courts separate property under equitable distribution. This rule states that each spouse receives a fair and equitable portion of marital assets, depending on certain factors. These include:
- How long the couple was married
- Each spouse’s unique circumstances
- The contributions of each spouse to the marriage and marital assets, including:
- Economic contributions
- Care and education of children
- The interruptions of individual careers or education to aid the marriage
- The capabilities of each spouse to find gainful employment that does not prevent them from caring for any children in their custody
These factors also influence the court’s decisions about spousal support.
When a spouse hides marital assets, they end up with a greater portion of marital assets after property division, as the hidden assets are not valued and accurately separated. When a spouse hides separate assets, their separate assets are not correctly valued. Separate assets are often considered as part of each spouse’s unique circumstances, so the court may award a spouse more marital assets, believing that they have fewer resources than they do.
In both cases, the other spouse receives an unfair amount of marital assets. Depending on the significance of the assets hidden, the other spouse may see significant financial instability.
Penalties for Hidden Assets in Divorce
When a couple gets a divorce, they must exchange all financial asset and debt information to value and determine property division. This is called discovery. When this occurs outside of court, spouses have the option to have an informal discovery process. Although spouses are still compelled to reveal all financial information, discovering a lying spouse is more difficult.
When discovery is formal and court-ordered, it is harder to hide assets, as divorce attorneys have more tools and answers are given under oath. Your attorney can determine the right tools to find hidden assets, such as interrogatories, requests for documents, and subpoenas. Formal discovery is a part of every divorce that is managed by the court, and it can also be requested for divorces that are handled out of court. If you suspect that your spouse is hiding assets, it is in your interests to request formal discovery.
There are several potential consequences of hiding assets and lying under oath. The court may decide on the following civil or criminal penalties:
- Determining that equitable distribution should financially favor the other spouse
- Awarding all assets that were hidden to the other spouse
- Charging the spouse who hid assets with contempt of court
Contempt of court is a criminal offense that can result in fines and a maximum of 30 days in jail.
FAQs
Q: What Happens If You Hide Money in a Divorce?
A: Hiding money during a divorce could result in criminal penalties. If you hide assets, either marital or separate assets, during a formal discovery process, this is considered contempt of court. In Nebraska, you could face up to 30 days in jail and fines. Additionally, the court may take other actions, such as awarding your spouse with the assets you attempted to hide or giving them a higher share of marital assets.
Q: How Are Assets Split in a Divorce in Nebraska?
A: When the court makes decisions for asset division, it operates by equitable distribution guidelines. Instead of splitting marital assets and debts perfectly equally, the court divides them equitably. The court assumes that each spouse has an equal claim and then amends this assumption based on factors related to their marriage.
Spouses can negotiate their settlement agreement outside of court if they do not want their assets divided by equitable distribution. As long as the court believes the agreement to be fair, it will approve.
Q: Can I Empty My Bank Account Before a Divorce?
A: Typically, you should not empty your bank account before divorce. If it is a joint account, it may appear that you are hiding assets or trying to waste marital assets. This is not viewed favorably. If the account is considered separate property, it may be less of an issue. Separate property is anything that you owned prior to marriage and that your spouse has not monetarily contributed to.
Q: Who Loses the Most in a Divorce?
A: Both spouses in a divorce lose a lot and are often affected in different ways. Many studies show that women are more financially affected, and a few studies show that men see a more significant drop in their mental health and well-being.
The negative economic effect on women can be related to an average lower income and earning capacity for women, the impact on their employment and earning capacity when they have children, and the insufficiency of spousal support and child support.
Contact Stange Law Firm to Maintain Your Financial Stability
Divorce is always a difficult process that has a serious financial impact on all parties. When one spouse hides assets, this negative impact is much worse. An attorney at Stange Law Firm can help you navigate formal discovery to better protect your financial future. Contact our firm today.
