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Think twice before hiding assets during divorce

When a couple works through a divorce, there are likely ill feelings between the spouses. In anticipation of working through property division, child support payments and alimony settlements, a spouse may think that setting aside some money would be a smart way to ensure one leaves the marriage with more assets than one's spouse.

However, a recent Forbes article warns against hiding assets during a divorce. Both spouses are required by law to openly declare all assets during the divorce process. Stashing thousands of dollars into a hidden bank account just before a divorce and omitting those funds when declaring one's assets is illegal. This type of action can interfere with accurately determining property division and child support payments.

In addition to assets, each spouse must declare all income, expenses and debts accurately. Again, misstating these amounts could result in negative consequences. For example, a California woman won the lottery only a week and a half before she filed for divorce. She did not include her $1.3 million winnings when she disclosed her assets. The judge determined that because she had "acted out of fraud or malice" by hiding the lottery winnings, the husband would keep all $1.3 million the woman had won.

For most couples, there will be no lottery winnings on the line, but any kind of assets are important during a divorce. If one spouse suspects his or her soon-to-be-ex is withholding information or submitting false amounts of assets, looking further into the situation may be beneficial.

In these situations, having a strong divorce attorney on one's side is critical. An experienced divorce attorney will be able to help one understand the process of divorce. In addition, an attorney can help ensure one abides by the law when declaring one's assets, expenses, income and debt.

Source: Forbes, "What are the consequences of hiding assets during divorce?" Jeff Landers, Nov. 14, 2012

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