Stashing The Goodies Before The Split – Why Hiding Assets Before a Divorce Is a Bad Idea!

Burying some money in the backyard will get you into more trouble than it’s worth!


One temptation that many people face when contemplating a divorce, is the desire to stash something away so that you won’t be forced to split it with your spouse. This can be especially enticing if you’re angry with your spouse. What better way to get back at them, than by reducing their portion? Alternatively, if you feel that you worked hard to earn what you have, it’s easy to believe that you should be entitled to keep it.


Normal as this urge may be during a divorce, it’s also a very dangerous one that could get you into a world of legal trouble down the road! Yes, there’s always the chance that you’ll get away with it, but is it really worth the risk? The answer is no! When you look at the possible legal penalties for hiding your assets, it really isn’t worth it.


Michigan is an “equitable distribution” state, which means that a court in Michigan would aim to divide a divorcing couple’s assets as fairly as possible. Each spouse is legally entitled to a portion of their combined assets, but not necessarily half. The court usually tries to look at a variety of factors when dividing assets, including how long the marriage lasted and what each spouse contributed.


During the discovery process, which happens at the start of a divorce, a couple gathers information about their combined marital assets. This includes all relevant financial information like: bank statements, account balances, 401 K information, trusts, and mutual funds. This, along with information about other assets like properties and vehicles you own will all be collected to provide a complete picture of your financial worth as a couple.


The price you would pay isn’t worth the assets you want to hide!


Based on the information provided, each party’s attorneys will work together with each spouse to create an equitable divide. If the couple isn’t able to come to an agreement and divorce goes to court, a judge will make the determination. If you lie, or try to cover up assets during the discovery process, regardless of how justified you may feel in doing so, you are likely to find yourself losing more than you would have if you had just been honest to begin with.


Under Michigan law, one party cannot hide assets to the detriment of another during divorce proceedings. The court cannot make an equitable property division without a complete picture of each couple’s finances. This means that hiding assets is considered to be a refusal to cooperate with the court and could result in fraud charges. In addition, a person who refuses to respond to legal inquiries during the discovery process may be held in contempt of court and be subject to penalties and fees.


There have been instances where a one spouse has hidden away assets, and when it was discovered, the judge awarded all of the assets to the other spouse. One notable ‘hidden assets case in Michigan was Sands vs Sands (1992). In this case Mr. Sands hid assets during the primary trial period, which were later found after the trial. The court conducted a new partial trial and reconsidered the property division, awarding Mrs. Sands all of the assets. In addition, because Mrs. Sands had accrued additional attorney’s fees as a result of her husband’s actions, the court ordered Mr. Sands to compensate her by paying for 70% of her attorney’s fees.


So, regardless of how hard you feel that you had to work to earn what you have, and irrespective of how angry or betrayed you may feel as a result of your spouse’s actions, that old adage still holds true – honesty is the best policy.


As experienced divorce attorneys, we always advise our clients to be completely honest during the discovery process. The penalties for lying and trying to hide assets can be financially devastating, not to mention the fact that there is always the possibility for criminal charges as well. If you have any questions about the divorce process, please call us at 517 886 1000. We are here to help.