Hiding Assets During a Divorce

"My husband and I have not been living together for two years now and he is filed for divorce.  The terms of the divorce in my opinion were not fair so I contested the case.  The court has demand that both of us list all assets, income, debts, and expenses.  He did not disclose that he has a vintage 1965 Ford Mustang that he bought last year.  Also I am sure he is hiding other assets and is not completely honest about his income.  Can he get in trouble for hiding this information from me and the court?  And what happens if he lies to the court?"

The short answer is yes.  It’s a legal requirement of all divorcing couples: Each spouse must openly and honestly disclose all assets (and income, expenses and debt). Unfortunately, though, it seems some people simply can’t resist the temptation to lie or cheat in order to keep at least a portion of those assets solely to themselves.

Many women are surprised to learn just how commonplace it is for husbands to hide assets from their wives. These men use a wide range of dirty tricks so they can:

• Hide, understate, or undervalue certain marital property,
• Overstate debts,
• Report lower than actual income, and/or
• Report higher than actual expenses.

Ultimately, a husband who is hiding assets is hoping to keep more marital property for himself while preventing his wife from getting the fair settlement she’s entitled to. This kind of behavior is illegal in many cases.

I’ve seen estranged husbands engage in these shady behaviors time and time again. In fact, according to the National Endowment for Financial Education, about one-third (31 percent) of US adults who combined assets with a spouse or partner say they have been deceptive about money, and women are more likely than men to say their partner or spouse lied to them about finances, debt, money earned (65 percent vs. 47 percent respectively).

As the NEFE outlines in this press release, the study also found that:

• Nearly three in five of those surveyed (58 percent) said they hid cash from their partner or spouse.
• More than half (54 percent) hid a minor purchase from their partner or spouse.
• An additional 30 percent hid a statement or a bill from their partner or spouse.
• 34 percent admitted they lied about finances, debt, money earned.

But, make no mistake about it: Lying during divorce proceedings is illegal.

In Arizona the rules of family court procedure ensure that when someone signs a court document they are swearing under oath that the contents of the document is true and correct to the best of their knowledge and belief.

When your husband signs an Affidavit of Financial Information–which is required in every contested divorce –he is swearing, under penalty of perjury, he is telling the truth about his finances and disclosing all assets, liabilities, income and expenses. (For instance, he must disclose the stock options he was granted by his employer even if no one specifically asked him if he had stock options.)
When someone lies under oath, he/she can face very serious consequences. Naturally, penalties vary from state to state (and from case to case), but in general terms, the law empowers the courts with a variety of different remedies for such blatant contempt of court. For instance, if your husband knowingly violates asset disclosure laws, a judge could order him to pay your attorney fees and/or fines. Or, he could be subject to a dismissal of his claims. In the most serious cases, your husband could even face incarceration.

In one case a family court judge ruled that a woman had violated state asset disclosure laws because she neglected to reveal she had won $1.3 million in the state lottery . . . just 11 days before she filed for divorce!

The judge in this case determined that the wife had acted out of fraud or malice, and as a result, he awarded all of the winnings to the ex-husband.

In a situation like this since Arizona is a community property state, the husband would have been entitled to receive half of the lottery fortune –if the wife had properly disclosed it. Instead, a judge could awarded every penny of the $1.3 million.

In another scenario, if a husband deliberately hid assets during his divorce’s primary trial period. When assets are discovered after the divorce is finalized, the court can reconsider the property division and awarded the wife all of the found assets.

Hiding assets is not only misguided, underhanded, deplorable it is completely illegal and should be reported immediately.


 For more information call Discount Divorce & Bankruptcy for a FREE consultation.

The experienced family and bankruptcy document prepares at Discount Divorce assists clients throughout Arizona, including the cities of Ahwatukee, Anthem, Apache Junction, Avondale, Bisbee, Buckeye, Bullhead City, Camp Verde, Casa, Cottonwood, Douglas, Eloy, Grande, Carefree, Cave Creek, Chandler, El Mirage, Flagstaff, Florence, Fountain Hills, Gila Bend, Gilbert, Glendale, Globe, Goodyear, Gudalupe, Kingman, Lake Havasu City, Litchfield Park, Marana, Maricopa, Mesa, Nogales, Oro Valley, Paradise Valley, Payson, Peoria, Phoenix, Prescott, Prescott Valley, Queen Creek, Safford, San Luis, Scottsdale, Sierra Vista, South Tucson, Snow Flake, Sun City, Sun City West, Surprise, Tempe, Tolleson, Tucson, Waddell, Wickenburg, Winslow, Youngtown and Yuma.

Visit www.discountdivorcepro.com or call (602) 896-9020. Discount Divorce is located at 13817 N. 19th Ave., Phoenix, AZ 85023-6105.

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As always you should seek legal advice for specific issues like the one above before coming to Discount Divorce to have your documents done and processed so that your legal rights may be protected.