Preparing for divorce means focusing on a variety of different details while trying to prioritize certain personal goals. In theory, divorce should be a largely reasonable and fair process. The law seeks to prevent scenarios in which one spouse can cause major financial and legal harm to the other.
Sadly, there are still plenty of people who try to use divorce as a way of harming a spouse. They may do so by attempting to manipulate property division proceedings. Financial misrepresentation and misconduct are common issues during modern divorces. Intentionally misrepresenting the value of assets is a tactic some people use to prevent their spouses from receiving what they should during divorce proceedings.
How undervaluing property works
Divorce negotiations often begin with disclosures. Each spouse provides one another and the courts with information about their personal resources and financial obligations. Spouses then work together to negotiate a settlement or they wait for a judge to divide their property.
Someone trying to manipulate that process by undervaluing assets may claim that their house is worth what they paid for it when they first bought it or might claim that their entire personal wardrobe is only worth $300. The goal of such conduct is to reduce what the overall marital estate is worth. By doing so, they can ensure that they retain the maximum amount of property possible while limiting how much their spouse receives.
How to handle misrepresentation
Even someone who has always been honest and honorable during marriage can become aggressive and underhanded during divorce negotiations. It is dangerous to assume that a spouse made accurate disclosures and valuations.
One of the first forms of protection against financial misconduct is the thorough review of all disclosures and statements. Someone can theoretically spot signs of undervalued assets by going over financial records. They may then need to bring in professional assistance. An appraiser can provide a realistic fair market value for the marital home that reflects what it is currently worth, not what spouses paid when they first purchased the property.
Professionals can also help value businesses and other resources with variable values. Art, wardrobes, furniture, vehicles and investment holdings may all require assistance during the valuation process. Determining how much different resources are actually worth is necessary for a fair outcome.
Those who suspect the undervaluation of their resources may want to discuss those concerns with their lawyer. They can then explore whether bringing in a professional or multiple professionals might lead to a more reasonable property division outcome in their high-asset divorces. Establishing what marital property is actually worth is a key component of securing a fair portion of that value in many divorce cases.