Hiding assets in divorce leads to expensive consequences

On behalf of The Walters Law Group, Ltd. posted in Divorce on Wednesday, November 28, 2012.

It is not unusual for people to feel strongly about the money they make, especially when they are in the middle of a divorce. For example, a Chicago husband may feel that he works hard, and that his wife is not entitled to his money. In order to try and assure that he keeps what’s his, he may overstate debts, report higher expenses or lower income than what he actually earns.

While this scenario may seem like it should be rare, in reality, it isn’t, but it doesn’t mean it isn’t illegal. The National Endowment for Financial Education reported that over 30% of adults with combined assets were less than honest about their money. Some may think that hiding money is worth the risk, but illegal behavior can have very strong consequences, including fines and even prison in some cases. And when the deception is discovered in the midst of divorce proceedings, it’s not unusual for the judge to make an example out of the dishonest spouse in order to teach them a lesson.

In one case a woman won more than a million dollars shortly before her divorce. Since she lived in a community property state her husband was entitled to half her winnings, but since she tried to hide the loot, it all went to the husband in the divorce settlement. In another case, a husband attempted to keep a little extra something away hidden from divorce proceedings. Ultimately, the extra money was discovered, and it was all awarded to his ex-wife.

Of course, it’s not only important to always make sure you are honest and forthcoming about your own income and assets during a divorce. You also need to keep your divorce attorney of any suspicions you might have that your spouse might be less than honest. While there’s always a chance you could be wrong, if you’re right having someone on your side may make all the difference.

Source: Forbes, “What Are the Consequences Of Hiding Assets During Divorce?” Jeff Landers, Nov. 14, 2012