In Massachusetts, the assets of a divorcing couple will be split equitably. This does not necessarily mean a 50/50 split, but rather a fair division of assets and property based on various factors. When faced with the possibility of sharing assets, some spouses may attempt to hide them from the other spouse.
One may hide assets in a divorce by:
- Overpaying taxes to get a refund the following year.
- Asking an employer to delay a raise, commission, or promotion until after a divorce.
- Transferring assets to another account or to a friend or family member.
Because spouses are required to divulge all assets in a divorce, hiding them is illegal. Lying about assets is illegal, and a spouse may be held in contempt of court for these acts. Depending on the case, a judge may order a spouse who has hidden assets to divulge them and give the other spouse their fair share—or more.
One of the most famous cases of hiding assets happened back in 1996. After 25 years of marriage, a California man was stunned when his wife asked for a divorce—seemingly out of the blue. Little did he know that she had won the lottery just 11 days earlier. The woman kept her $1.3 million winnings a secret from her husband and did not disclose them in her divorce, and a Los Angeles family court judge ruled that she had violated asset disclosure laws.
The judge awarded every penny of the woman’s lottery winnings to her ex-husband.
Possible Signs that a Spouse Is Hiding Assets
We want to believe the best about our spouses, even when a marriage is coming to an end. There is some activity, however, that could indicate that your spouse is hiding assets.
The following are potential signs of hiding assets in a divorce:
- Secrecy: If your spouse is generally secretive about financial information, changes passwords to online accounts, or deletes/destroys financial documents, this could be a sign that they are hiding assets.
- Unusual financial transactions: If you notice transfers to unknown accounts, cash withdrawals, or other odd transactions, this could mean they are trying to hide assets from you.
- Missing valuables: Some spouses try to hide valuable property, such as jewelry or artwork, before a divorce, in the hopes of keeping it for themselves or selling it later.
- Unusual business practices: If your spouse runs a business, sudden and unexplained drops in income or increases in business expenses could be signs that they are attempting to hide assets through their company.
If you suspect that your spouse is hiding assets, it’s important to talk to your attorney.
In the California lottery case, the only reason the man discovered that his ex-wife was hiding assets was when he received a piece of mail two years after the divorce, from a company offering to help his ex-wife receive a lump sum payment for her lottery winnings. This threw up a bright red flag, and the man sought legal counsel. He obtained a court injunction just a few days later and found out the ugly truth: his ex-wife had won $1,336,000, payable in annual installments of $66,800 over 20 years.
Can I Recover Hidden Assets?
Seeking professional help is the best way to locate and recover hidden assets. An attorney can take care of the legal aspects of recovering hidden assets in your Massachusetts divorce. A forensic accountant can look into your spouse’s accounts to spot suspicious transfers or activity. You may even be surprised to discover assets that you had no idea existed in the first place.
Once all assets are located and made known to the court, only “marital assets” will be subject to equitable distribution. This includes any assets or property acquired during the marriage by either spouse. “Separate assets,” which may include inheritances, gifts, or property acquired before the marriage, are not subject to equitable distribution in Massachusetts.
If you have more questions about hiding assets and how a Massachusetts divorce lawyer can help you, contact Miller Law Group, P.C. at (508) 502-7002">(508) 502-7002. We can offer our insight and guidance.