Consequences of Hiding Assets

In Separation & Divorce, Wealth by Sarah Hink

Nobody is at his or her best at the end of a marriage. Honestly, how can anyone be? The once promising, long-term commitment has become unsustainable and painful. Too often, people make a bad situation worse by behaving badly in order to “win” or punish their spouse. One form of bad behavior is hiding assets during equitable distribution proceedings.

North Carolina divides marital property through equitable distribution. In an equitable distribution proceeding, each spouse produces an inventory of all property that he or she classifies as “marital” property. This is property—excluding certain gifts and inheritances—that was acquired by either spouse during the course of the marriage. The court takes the total market value of all marital property and divides it in an “equitable” manner based on numerous factors.

Of course, equitable distribution is predicated on both spouses providing a good faith and accurate inventory of property. So the “equitable” aspect of property division doesn’t really work the way it is intended if one spouse hides assets in order to keep more. Sadly, we’ve seen people make bad choices and take actions like:

  • Failing to disclose bank accounts or investments that the other spouse had no idea about;
  • Secretly withdrawing money from joint accounts and transferring the funds elsewhere;
  • Physically hiding property—such as jewelry or a vehicle—from the other spouse;

There can be serious consequences if you are caught hiding assets from the court during equitable distribution proceedings. First, the court can grant injunctive relief against you and make you pay the fees and costs that the other party incurred attempting to discover and recover the property. Significantly, the court can consider this misconduct when determining how to “equitably” divide your property—which can leave you in a worse financial position. Finally, we cannot understate the importance of acting in good faith; if a court considers you untrustworthy,there will likely be negative consequences..

New Direction Family Law

New Direction Family Law is a law firm that guides clients through all of the issues that come with the end of a marriage. We are painfully aware that this is a traumatic and emotionally charged time for our clients. We therefore strive to provide our clients with the strong representation they need to make informed, wise decisions during this turbulent time. Our attorneys are intelligent, experienced, and passionate about helping clients move into the future. If you need help, contact New Direction Family Law at (919) 719-3470 to schedule a consultation or visit our website.

Sarah J. Hink
New Direction Family Law

New Direction Family Law
newdirectionfamilylaw.com
(919) 719-3470