The division of marital assets during a divorce is often contentious. Spouses frequently have particular assets they want to keep, and they may simply want to come out of the divorce with more assets than their ex. This can lead to some spouses hiding assets in an attempt to influence the division. But is this legal?
Equitable Distribution in Minnesota Divorce Cases
The first thing to know about asset division in Minnesota is that Minnesota is an equitable division state. This means the court divides the marital assets in a fair but not necessarily equal manner. For example, instead of dividing assets in a 50/50 split, the court may award more assets to one spouse if that spouse is the primary custodian of the couple’s children or has less earning capacity due to their education level or disabilities.
When one party hides assets, it interferes with the court’s ability to accurately assess the financial situations of the parties and make a fair judgment. If not caught, hidden assets could significantly impact marital property division.
Consequences of Hiding Assets During a Divorce
A spouse who hides assets during a divorce can face various penalties, ranging from court sanctions to criminal prosecution. Depending on the type of asset concealment, the act could be considered fraud, which may lead to criminal charges. However, criminal charges are typically only used in severe cases.
In most cases of a spouse hiding assets, the court will impose other penalties, including:
- Awarding a larger share of marital assets to the affected spouse
- Requiring the at-fault spouse to pay fines
- Issuing contempt of court charges for lying to the judge
For example, if one spouse hides a bank account with $15,000 from their spouse and it is discovered, the judge may award additional marital assets worth $15,000 to the innocent spouse.
Common Ways Spouses Attempt to Hide Assets
Spouses who attempt to hide assets during a divorce use various methods, depending on the particular assets they want to hide and their value. Common tactics used to hide assets include:
- Underreporting income or overreporting debts
- Delaying business deals, bonuses, promotions, or other increases in income until after the divorce
- Transferring assets to friends or family temporarily
- Withdrawing cash from shared bank accounts and hiding it
- Opening banking or investment accounts without disclosing it to their spouse
These tactics often leave paper or digital trails that attorneys and investigators can use to identify the fraud and trace it back to particular actions taken by the at-fault spouse.
How a Lawyer Can Uncover Hidden Assets
Divorce attorneys often use the discovery process to uncover hidden assets. Discovery is a legal process that allows the parties to request financial documents and other evidence from each other. Attorneys then comb through these documents, looking for inconsistencies that could indicate fraud.
In more complex cases or cases where significant fraud is suspected, attorneys also work with forensic accountants and other financial investigators to trace asset transfers. Even if your spouse took steps to cover their tracks after hiding assets, these professionals’ knowledge, experience, and skills are still likely to uncover them.
Contact Our Lake Elmo Divorce Lawyers
If you’re going through a divorce and suspect your spouse may be hiding assets to influence the division of marital property, contact Coodin Law Office, LLC, for a free consultation with one of our experienced lawyers. We’ll thoroughly investigate your case to identify whether your spouse is acting in bad faith and take the steps necessary to hold them accountable for their actions.