What is the Penalty for Hiding Assets in a Divorce?

Divorce involves dividing marital assets, so extensive financial disclosures are required. Unfortunately, some spouses feel a desire to hide at least some of their assets. Their reasoning is simple. In a South Carolina divorce, a judge will divide your marital assets equitably (fairly). And South Carolina has a very broad definition of which assets qualify as marital. 

For example, any asset purchased while married is usually marital, as is income earned during the marriage. It doesn’t matter who purchased the item. For example, a wife might make twice as much as her husband and therefore buy a car with her own money. However, because she purchased the vehicle while married, the vehicle is probably considered marital property. That means the equity in the vehicle will need to be divided fairly between the two. 

Some spouses hide their assets instead. It’s probably not easy to hide a motor vehicle, but far easier to stash money in an out-of-state or even offshore account and not tell anyone. They might also own mutual funds or stocks, which they don’t disclose. Unfortunately, hiding assets can create problems—if you get caught. In this article, our Aiken, SC divorce lawyer explains in more detail. 

What are the Consequences of Hiding Assets? 

During divorce, each spouse must make extensive financial disclosures and submit them under penalty of perjury to the court. If you lie, then there are certain negative consequences. 

A judge might penalize the lying spouse by giving the other one a greater share of marital property. Of course, this requires the judge to find out about the hidden assets during the divorce. When that happens, however, judges often punish the offending spouse, who might receive far less than 50% of marital assets. To do otherwise would be to reward this type of behavior. 

There could be legal consequences, as well. For example, criminal charges can be brought against someone who commits perjury. This is a serious crime in South Carolina, with possible time in jail. 

If you give false testimony in court, then you could face felony charges and up to five years in jail. Otherwise, perjury is a misdemeanor that could net a defendant six months behind bars. 

Everything depends on the facts. Inadvertently failing to disclose assets is quite different from intentionally lying and even going to great lengths to hide assets. In fact, making an innocent mistake is not criminal. Consequently, a judge probably won’t penalize a spouse for carelessly forgetting to report a small asset. 

A Judge Might Set a Prenuptial Agreement Aside 

This is another consequence of hiding assets. Some married couples have a prenuptial agreement, which sets out their agreement about what will happen in the event of divorce, such as whether a spouse will waive the right to alimony.  Couples might also determine ahead of time how they’ll divide marital property when they divorce. 

Failing to make a full disclosure of assets can result in a judge setting aside the prenuptial agreement. Essentially, the judge will find it is not enforceable, which means the judge won’t consider it when it comes to determining property division. 

This is a tragic result. The goal of a prenup is predictability—you know what you’ll get in the event of divorce. By hiding assets, however, you jeopardize its validity. 

How to Find Hidden Assets 

At Surasky Law Firm, we have handled many divorces. We always discuss with our clients whether they think their spouse is hiding assets. Sometimes it’s hard to tell. After all, you don’t have access to all of your spouse’s emails, mail, and personal information. Nonetheless, you might have suspicions. AS an example, your spouse might have a lot of jewelry but not explain how she is affording it. This could mean she has secret bank accounts. 

When we have suspicions, we can use various tools to find hidden assets. For example, we can look at bank records and see if your spouse is shifting money in and out of accounts. If so, we can ask, “Where is that money going?” or “Where did it come from?” By digging further, we might find a hidden bank account. 

We can also work with a forensic accountant to review tax returns and investment information. Forensic accountants are professionals who have expertise at tracing money. They can find hidden accounts, which we then bring to a judge’s attention. 

Hidden versus Wasted Assets 

Some spouses waste marital assets. For example, your husband might be having an affair. He spends thousands of dollars to buy gifts for his new girlfriend and even splurges for a trip to the Caribbean. This type of “waste” also matters for a divorce. Often, a spouse hides a new romantic partner and hides the cost of gifts. 

We want to tell a judge if your spouse is wasting assets in this manner. Spending obscene amounts of money on a gambling or drug addiction is another type of waste. A judge might give the spouse who wastes assets less marital property. 

How to Report Information Accurate 

One reason to hire a divorce lawyer is to ensure your submissions to the court are accurate. You don’t want to be accused of hiding assets, even by mistake. 

Our divorce lawyer can review all your paperwork before submitting them to the court. We will also gather financial information ahead of time. If you accidentally forgot to disclose an asset—like a small bank account—we can file a timely amendment with the court. It’s always best to be upfront. 

Speak with an Experienced Divorce Lawyer Today 

Divorce is a complicated experience. Many men and women are not prepared for the paperwork, hoping divorce is simpler than it really is. If you are headed to divorce court, please get the legal help you need. Surasky Law Firm can assist the Aiken, SC community with family law issues, including divorce. 

Whether you have been married for 30 years or only walked down the aisle recently, we can strategize to get the best divorce possible. For a consultation, please call our firm today.