Are You Suspicious That Your Spouse is Hiding Assets?

In divorce cases, a surprisingly large number of people set out to hide assets from the court, even though the law requires equitable distribution of marital assets. The reasons for doing so vary, although they are usually rooted in anger, greed, or spite. Divorce does not bring out the best in any of us and sometimes, these negative emotions lead to hiding assets in violation of Michigan law.

What Does the Law Say?

Michigan law is very clear and straightforward on the issue of marital assets: you are legally obligated to present the court with a detailed accounting of all of your assets and debts when you are getting divorced. Somebody who does engage in the practice of hiding assets is therefore acting in contempt of the court and committing a fraud upon the court. This can result in harsh penalties. Sometimes, a court will be so angered by this practice that if an asset that was not listed as a marital asset is discovered, the court will just give it to the other party.

How Do People Try to Trick the Court and Hide Assets?

People employ many subterfuges to hide wealth from their spouses and the court. Sometimes the party trying to hid assets will purchase portable wealth, like diamonds or cars, and then store those items someplace the court will not look and the other spouse cannot access.

Sometimes, evidence of securities, stocks, or bonds are concealed by the holder. Sometimes, the party seeking to hide assets funnels money into a business owned by a friend or family member by making purchases that can later be returned for cash. Sometimes, people pay off fictional debts to persons who agree to give most of the money back secretly at a later date. Really angry or desperate individuals trying to hide assets might sell the assets at a price far below market value and agree with the party to whom the assets are sold that the remaining cash will be transferred only after the divorce is final.

Finding Hidden Assets is Costly and Time Consuming

Hunting down assets you think your spouse is hiding is often an expensive, time-consuming process. There are three ways that assets can be searched for:

Informal Discovery. In informal discovery, your lawyer will make telephone calls and send correspondence to the proper targets like banks, close family, and friends, asking questions about your spouse's financial behavior, such as if any large deposits have been made recently or new accounts opened;

Formal Discovery. In formal discovery, your attorney will issue requests, subpoenas, interrogatories, and notices of deposition. Questions will be asked orally and in writing and documentation will be sought to backup all answers related to the whereabouts and amounts of all marital assets; and

Expert Discovery. Expert discovery is more expensive than informal or formal discovery, because you have to hire and pay a forensic accountant. The forensic accountant will painstakingly pore over your spouse's finances. Experts are used usually only in cases where there are millions of dollars in assets at issue.

What if You Discover an Asset Has Been Hidden?

Depending on how far along the court proceedings are, if you uncover hidden assets, you may want to ask the court to move backward and re-work the formulas used in the proceedings based upon this new information. If the assets are not discovered until after the divorce is final, your attorney has to file a motion to set aside or modify the judgement. This filing requests that the court consider the effects of the dishonest and unjust behavior engaged in by your spouse and decide whether the behavior is so egregious that the existing divorce settlement needs to be modified or set aside. The most important part of the discovery doctrine is that there is a one year time limit on financial discovery of hidden assets. That means that even if you find out on day 366 after your divorce that your spouse hid two million dollars inside your hand-crocheted pillowcase, you have no recourse.

Work with a Bloomfield Hills Divorce Attorney

If you are worried that your spouse might be hiding assets, please contact Michael Robbins to schedule an initial consultation and discuss the particulars of your case. Call 248-646-7980 or contact him online to schedule your appointment. As an experienced divorce attorney located in Bloomfield Hills, Mr. Robbins accepts cases in the Tri-County area of Oakland, Wayne, and Macomb counties and throughout the state.