When couples get divorced one point of contention that is often hotly debated is how their assets will be divided. This is particularly true in high asset divorces because so much is at stake. In Michigan, family law courts charged with distributing a couple’s assets are legally required to divide the assets in a way that is “equitable” (i.e. fair). When determining how to equitably distribute a couple’s assets family law judges take a variety of different factors into consideration, including the assets of each party. Therefore, divorcing couples are legally required to openly and honestly disclose all assets (including all income, expenses, and debts), and intentionally failing to do so constitutes fraud. Even so, in high asset divorce cases it is actually quite common for one or both spouses to fraudulently dissipate or hide marital assets in an attempt to prevent their spouse from getting what they are legally entitled to.
Fraudulently Dissipating Assets
When people think of divorce fraud they typically think about a spouse hiding assets, but in reality divorce fraud can also occur when one spouse intentionally wastes assets in contemplation of divorce in order to minimize the amount that their spouse will eventually receive. Spouses sometimes attempt to fraudulently dissipate assets by:
- Not paying the mortgage so that the family home falls into foreclosure,
- Spending excessively,
- Giving money away, and/or
- Destroying expensive property.
Fraudulently Hiding Assets
The most common type of divorce fraud involves hiding assets. Spouses attempt to do this in a variety of different ways including:
- Opening secret safe deposit boxes or bank accounts,
- Unfunded trusts,
- Undervaluing property,
- Overstating debts, and/or
- Funneling money to others or into a business owned by a friend or family member.
The Consequences of Committing Fraud During Divorce
Simply put, dissipating or hiding assets in contemplation of divorce to the detriment of your spouse constitutes fraud and is illegal. But what are the consequences of committing fraud during a divorce? An informative article from Forbes notes that specific consequences differ from state to state, and case to case, but that spouses who are caught fraudulently dissipating or hiding assets are often ordered to pay a fine and/or their spouse’s attorney’s fees. In extreme cases the fraudulent spouse may even be incarcerated. In Michigan, there is no independent action for divorce fraud, however, a divorcing spouse who hides assets may be held in contempt of court and fined, and/or the unsuccessfully hidden assets may be awarded entirely to the unoffending spouse.
Reach Out to Us for Help
While no one wants to believe that their spouse may be fraudulently hiding assets, it is important to release that divorce fraud, especially in high asset divorces, is not only very serious but is actually fairly common. If you suspect that your spouse is hiding assets or income alert your attorney immediately so that they can conduct a thorough investigation, enlist the help of financial professionals if necessary, and get to work fighting for your rights as soon as possible. Here at the Law Offices of Michael A. Robbins our experienced high asset divorce attorneys have extensive experience uncovering divorce fraud and would be happy to assist you. Contact our Bloomfield Hills office today at (248) 646-7980 to schedule an initial consultation.