In high-asset divorces hidden assets are a common problem

This article looks at how common hidden assets are and how people going through divorce can spot them.

Ending a marriage is never an easy thing to do and many people going through a divorce want the process to be over with as quickly as possible. However, trying to rush through a divorce can lead one party to overlook some issues that could prove important in the years after their divorce. One of the most common issues, especially in high-net-worth divorces, is the problem of hidden assets. Below is a look at how widespread hidden assets are and how they can be uncovered.

Hidden assets are not unusual

A lot of people going through divorce may not have the best opinion about their soon-to-be ex-spouse, but they often find it hard to believe that the person they spent years living with could be hiding assets. However, that assumption may be misplaced. As CNBC reports, one survey found that about 15 percent of consumers admitted to hiding a bank account from their spouse, while 14 percent have misled their spouse about their income. In other words, hidden assets are a lot more common than many people realize.

Hiding assets is a problem in divorce because it essentially denies one spouse from getting the settlement he or she deserves. Both spouses are supposed to fully disclose all of their assets and debts so that marital property can be divided fairly. If one spouse is hiding assets, then the other spouse will not be receiving his or her fair share of the estate. In high-asset divorces, hidden assets can amount to hundreds of thousands and even millions of dollars.

How to spot hidden assets

As Forbes points out, there are quite a few ways to hide assets, but some tactics are more common than others. Friends and family members may be used in a variety of ways. For example, a spouse could create fake debts with a family member or friend or give someone close a high-value gift, such as a yacht or piece of art, knowing that the 'gift' will be returned after the divorce is finalized. Such tactics help to artificially suppress the net-worth of the spouse during the divorce.

If one of the spouses going through a divorce manages a business, then a sudden spike in its business expenses or a decline in revenue should raise red flags. The managing spouse may try to make his or her financial situation appear worse than it actually is. An unscrupulous spouse may also defer salary, commissions, or bonuses until after the divorce is finalized.

Help with family law

A divorce is more than an emotional breakup; it is a legal and financial split as well. That's why a person going through a divorce should contact a family law attorney for help. An attorney can provide advice and assistance designed to advance her client's best interests, including, if prudent, the assistance and knowledge required to uncover assets a former spouse may be hiding.