When married couples decide to divorce in New York, they have to divide their property. Asset division is often one of the most challenging and emotional aspects of modern divorce, as both spouses may feel very strongly about what they believe is fair and appropriate.
Some people are so upset about the divorce or about their spouse’s conduct during the marriage that they try to alter the outcome of divorce proceedings by hiding property from the courts and their spouse. Typically, the divorce process requires an honest and complete disclosure of one’s assets and financial obligations, but not everyone complies with those rules.
How might it affect divorce proceedings if one spouse attempts to hide assets from the other and the New York family courts?
There might be an unfair outcome
The goal of hiding assets is to exclude them from property division proceedings, and some spouses are successful in their efforts to manipulate the process. No one discovers that they have hidden assets or set aside marital income in an account that they did not disclose, so they end up keeping all of the hidden assets, thereby depriving their spouse of a fair outcome in the divorce process. Those who truly believe that their spouse intends to defraud them or lie about the property may want to be particularly cautious about uncontested divorce proceedings. An out-of-court settlement that doesn’t involve formal financial discovery can provide a layer of protection for the spouse lying about their finances.
There could be serious consequences
Occasionally, one spouse suspects the other of an intent to hide assets or manipulate marital property for personal benefit, so they, their lawyer or a forensic accountant go over the paperwork very carefully. If someone uncovers hidden assets before the end of the divorce, they can present evidence about the financial misconduct of their spouse to the judge hearing their case. The judge may very well alter how they ultimately divide the property and debt of the spouses based on that misconduct. In fact, if someone discovers financial lies after a divorce, that may be one of the few scenarios in which the family courts will consider revisiting property division and potentially adjusting the outcome.
Those who understand the impact that hidden assets can have on divorce proceedings may be able to more easily avoid making mistakes themselves and may be better able to identify misconduct on the part of their spouse. Identifying and addressing issues that can complicate property division will typically benefit those who are preparing for divorce in New York.