Even in the most cooperative of divorces, your spouse could be hiding their assets. This is often done to lower the amount of money awarded to the former spouse or even to lower the amount of child support owed.
In Michigan, divorce requires equitable division of assets, but this doesn’t mean equal. It is illegal for one party to hide any assets from the other. Failure to disclose all assets can lead to charges of fraud and harsh penalties. Even if you don’t outright suspect your spouse of hiding assets, it can easily happen, and not discovering it will mean less to consider when the equitable division happens. If you have not been involved in finances throughout your marriage, it can be even more difficult to know if assets are hidden.
In Part 1 of this topic, we are going to discuss some common and sneaky ways a spouse could be hiding assets in your divorce.
Common Ways Assets Are Hidden
There are a lot of ways a spouse can hide their income or assets when going through a divorce. A common method is to have payments put into an account unknown to the other spouse. One clue to this type of activity is if you know how much your spouse is making and you are not seeing that full amount in the usual account. This can also easily be done with bonus money or other perks, because it may not be obvious those amounts are missing, especially if they are not commonly put in a shared account.
This can also be done by transferring large sums of money elsewhere. The transfer could be to another account of the spouse, to a new girlfriend, a relative, or a friend. They may attempt to cover it by saying they are paying back an owed debt, but any move like this around a divorce should sound an alarm.
If there is a business in the picture, it can easily be used to hide assets. One way you may not think of is paying more in taxes so that there is a higher tax return. Some more troublesome things can be done, such as paying a nonexistent employee. People may go to great lengths to hide their assets, especially in a heated divorce.
Another sneaky way to hide money is to purchase physical items and misrepresent the cost, or simply just undervalue the items they already possess. This can easily be done in conjunction with a business.
Regardless of how assets are hidden, it is your right to have them considered in your divorce. The Kronzek Firm is here to help if you believe assets are being hidden in your divorce. How can we do that? Check out Part 2 of our discussion, coming soon!