Divorce can be a stressful and emotional process for both parties involved. When a marriage ends, the legal aspects of dividing assets can become a significant part of the proceedings. While most couples are able to fairly disclose and divide their assets, there are situations where one spouse may try to hide assets to avoid sharing them. This is particularly common in complex divorces, where financial portfolios are more extensive and can include business interests, multiple properties, investments, and other significant assets. In New Jersey, the courts take the issue of hidden assets very seriously. The legal system has processes in place to detect, uncover, and address attempts to conceal wealth or property during divorce proceedings. Understanding how New Jersey courts handle hidden assets is crucial for anyone going through a complex divorce. At, Tanya L. Freeman, Attorney at Law , we are here to guide you through the legal process and help you navigate the complexities of your case.
What Are Hidden Assets in Divorce?
Hidden assets refer to any property, income, or financial resource that one spouse tries to conceal from the other during the divorce process. This is often done in an attempt to keep a larger share of the marital assets. Hidden assets can include money, real estate, business interests, stocks, bonds, or even personal belongings such as valuable jewelry or collectibles. When a spouse hides these assets, they are trying to avoid their obligation to equally divide them as required under New Jersey’s equitable distribution law.
New Jersey law requires both parties in a divorce to fully disclose all assets and liabilities. Failure to do so can result in severe penalties, including fines, sanctions, and changes in the final distribution of assets. The court’s goal is to ensure a fair and equitable division, which becomes impossible if one spouse is hiding assets from the other. In complex divorces, the process of uncovering hidden assets can involve forensic accountants, legal professionals, and sometimes private investigators.
Methods of Hiding Assets
There are several ways a spouse may attempt to hide assets in a divorce. One common method is underreporting income, especially if one spouse owns a business or is self-employed. By manipulating the books, inflating expenses, or delaying income until after the divorce is finalized, a spouse may try to hide the true value of their earnings. Another method involves transferring assets to friends or relatives, making it seem as though those assets no longer belong to the individual. Some people even create fake debts, making it appear that they owe money when in reality they do not.
More than an accomplished divorce and family law attorney, Tanya L. Freeman, is a consummate professional with a wealth of corporate and life experience. Known as a leader and strategist, Tanya L. Freeman was appointed by the Governor of New Jersey as Chair of the Board of Directors of the University Hospital in Newark, New Jersey. Tanya L. Freeman also presents among the ranks of public speakers. She captivates and inspires professional groups nationwide. "Tanya has the eloquence and oratory brilliance with the ability to forge deep connections with her listeners."
Tanya L. Freeman, Attorney at Law
Managing Partner of the Family Law Practice at Callagy Law
Offshore accounts, hidden investments, and even secret bank accounts are other ways assets can be concealed. In a complex divorce, where the financial landscape is more intricate, it can be easier for a spouse to hide assets among multiple accounts and business ventures. New Jersey courts are well aware of these tactics, and have developed strategies for identifying and addressing such behavior.
The Role of Forensic Accountants
In cases where hidden assets are suspected, forensic accountants play a vital role. These professionals are skilled at analyzing financial documents, bank records, and business transactions to uncover discrepancies. Forensic accountants can trace where money has been moved or hidden, making it difficult for a spouse to successfully conceal assets. They can identify irregularities such as unreported income, unexplained transfers, or inflated business expenses that may point to hidden wealth.
In New Jersey, if the court suspects that one spouse is hiding assets, it may order an investigation into the couple’s finances. This is where a forensic accountant’s experience becomes essential. By thoroughly examining financial records, these professionals can help ensure that all assets are accounted for, allowing the court to fairly divide marital property.
Legal Consequences for Hiding Assets
Hiding assets in a divorce is not only unfair; it is also illegal. New Jersey courts take a firm stance against such actions. If a spouse is found to be concealing assets, they may face serious legal consequences. These can include fines, sanctions, and the loss of any claim to the hidden assets. In some cases, the court may award a larger portion of the marital estate to the innocent spouse as a penalty for the dishonest behavior.
Additionally, the court may hold the offending spouse in contempt of court, which can result in further penalties such as additional legal fees or, in extreme cases, jail time. It is essential for both parties to be transparent during the divorce process, as the consequences of dishonesty can have lasting effects on the outcome of the case.
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How Courts Uncover Hidden Assets
New Jersey courts have a variety of tools at their disposal to uncover hidden assets. In addition to relying on forensic accountants, the courts can issue subpoenas to obtain financial records, bank statements, and tax returns. The discovery process in a divorce allows both parties to request information from each other, including documentation of assets and liabilities. If one spouse fails to provide the requested information, the court can compel them to do so through legal orders.
Depositions are another method used by the courts to uncover hidden assets. In a deposition, a spouse may be questioned under oath about their finances and assets. Lying during a deposition can lead to perjury charges, adding to the legal troubles faced by the spouse hiding assets. The court may also review tax returns, business records, and other financial documents to trace the flow of money and identify any attempts to hide wealth.
Equitable Distribution in New Jersey
New Jersey follows the principle of equitable distribution when dividing marital property during a divorce. This means that the court will divide assets in a way that is fair, though not necessarily equal. Factors such as the length of the marriage, the standard of living during the marriage, and the financial needs of each party are considered when determining how assets should be split.
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If hidden assets are discovered, the court may adjust the distribution of property to account for the dishonesty. For example, if a spouse is found to have concealed a large sum of money, the court may award a greater portion of the marital estate to the other spouse. This ensures that the division is fair and prevents the dishonest spouse from benefiting from their actions.
Protecting Yourself in a Divorce
If you are going through a divorce and suspect that your spouse may be hiding assets, it is important to take action to protect yourself. Working with a knowledgeable attorney is crucial, as they can guide you through the legal process and ensure that your rights are protected. Your attorney can also help you gather the necessary documentation and evidence to uncover hidden assets.
Additionally, keeping detailed records of your finances, including bank statements, tax returns, and investment accounts, can be helpful in proving your case. If you believe that assets are being hidden, your attorney may recommend hiring a forensic accountant to thoroughly investigate your spouse’s finances. Taking these steps can help ensure that you receive a fair share of the marital property and that hidden assets are brought to light.
Divorces can become particularly complicated when one spouse tries to hide assets. Fortunately, New Jersey courts have robust procedures for uncovering these assets and ensuring a fair division of property. Forensic accountants, legal investigations, and the court’s discovery process all play a role in identifying and addressing hidden wealth. The consequences for hiding assets are severe, and New Jersey courts are committed to equitable distribution based on full transparency.
If you are going through a divorce and believe that your spouse may be hiding assets, it is essential to seek legal representation. Tanya L. Freeman, Attorney at Law, can provide the guidance and support needed to navigate the complexities of a divorce. Our firm has experience in handling complex financial issues in divorce cases and is dedicated to protecting your rights. Contact us today to schedule a consultation and learn how we can help ensure that all assets are fairly disclosed and divided.