Fraud – Hiding Marital Assets

Before starting a divorce, I tell my clients who earn less money than their spouses, (known legally as “the less monied spouse”), that it is extremely important to know the nature and extent of the assets and property they got during the marriage (known legally as “marital property”). In order to negotiate a fair and equitable distribution of the marital assets between you and your spouse, you also need to know the value of some of these assets, which includes not only bank accounts and investment accounts, but also such assets like, for example, your marital home, and any other real property, you own, as well as the value of both spouses’ pension and retirement, and any businesses and investments established during the marriage, jewelry, antiques, etc.

The value and equitable distribution of such marital assets is also necessary to determine whether or not you are entitled to receive maintenance (alimony) payments from your spouse.

Divorce attorney Ingrid Gherman discusses what is “fair” and how the division of property and assets is determined, the particular factors considered by the New York Courts, and how spousal maintenance (alimony) is awarded. The first ingredient necessary in obtaining a fair and equitable asset distribution or an award of maintenance is the complete and truthful exchange of financial disclosure between you and your spouse. Unfortunately, this is not always easily accomplished. If your spouse is hiding or mis-representing his or her income, financial holdings, or other property, this can result in your spouse’s acquiring an unfair and disproportionate share of the marital assets in a divorce. It is the responsibility of you divorce lawyer to demand and pursue thorough financial discovery from your spouse to insure that your spouse is not engaging in actions intended to abscond, hide, or manipulate marital property to his or her advantage. You must have full transparency and financial disclosure before you and your divorce lawyer can begin to negotiate an amicable financial divorce settlement out of court or, if necessary, presenting your case to trial before a New York Supreme Court Judge.

Fraud and concealment

Some of the ways in which your spouse (the “monied spouse”) can attempt to diminish your marital assets include:

  • Enlisting family or friends to conceal marital assets;
  • Transferring title to property or lending cash money to other people;
  • Dissipation of assets such as excessive spending, or disposing of property without your knowledge or consent;
  • Allowing the devaluation of assets through foreclosures, destruction, or deterioration of property by refusing to pay bills, such as mortgage or neglecting to make necessary repairs and maintenance of such property;
  • Gambling;
  • Money spent on extramarital affairs (flowers, jewelry, vacations, etc.);
  • Hiding assets in trusts, overseas bank accounts, shell entities, etc.;
  • Refusing or delaying compliance with your divorce lawyer’s financial disclosure demands;
  • Removing portions of the financial disclosure documents provided in response to disclosure demands;
  • Forgery of documentation and outright deceit.

Your spouse, the “monied spouse” commits financial manipulation when the stakes are higher in divorce actions with a high-net-worth. A “monied spouses” such as your spouse who is a high - level executive, business owner, or professionals (doctor, lawyer, accountant, etc.) often has more options at his or her disposal to conceal or reduce their apparent worth. Your spouse has access to employment contracts, stock options, deferred compensation, vacations and other valuable executive employment benefits, disability and death plans, and many other hiding places.

The signs of financial concealment and discovering the truth

As a matrimonial lawyer in New York, representing clients in high net worth divorces, I am always looking for inconsistencies in the other spouse’s account of his/her finances because this means he or she is attempting to conceal something from my client. The same could be true if your spouse (the opposing party), refuses to turn over items of financial disclosure in a timely fashion or if documents are missing pages or particular time periods.

Forensic accountants can help

In my thirty-three years of representing clients in divorce cases, I continue to be successful to uncover and flush-out some of the other spouses’ actions that are intended to diminish the fair share my clients would receive in the equitable distribution of marital assets. I seek out forensic accounting experts who can assist in determining the nature and extent of authentic family wealth. There are other professionals who can be helpful in tracking down financial inconsistencies such as: private investigators, book keepers, real estate appraisers, business appraisers, etc. who can determine whether or not your spouse is dissipating marital assets. Before going forward with a full scale forensic accounting audit, as an experienced divorce attorney, I will first determine if the cost of such an undertaking balances against the potential gains for my client.

Contact Ingrid Gherman at (212) 941-0767 or send her your inquiry here.