Dealing with Asset Concealment during a Divorce

Going through a divorce can be a taxing and emotionally draining experience. When you add the suspicion of asset concealment into the mix, the process can become even more daunting. The Montgomery County Family Law Attorneys at the Law Offices of Tina Sharma, understand that navigating these waters requires more than just legal experience; it requires a compassionate approach that places your best interests at the forefront. Let’s delve into how to address the intricacies of asset concealment during a divorce in Maryland.

Understanding Asset Concealment in the Context of Divorce

Divorce is often painted with emotions, complexities, and a myriad of decisions. One of the vital aspects of this process is the fair division of marital assets. However, the landscape becomes increasingly intricate when one party engages in asset concealment, an act that can greatly disrupt the balance and fairness of divorce proceedings. Let’s delve deeper into understanding asset concealment within the context of divorce.

What is Asset Concealment?

At its core, asset concealment refers to the intentional hiding or misrepresentation of assets by one spouse to prevent their equitable distribution in a divorce. This can manifest in various forms, such as undervaluing assets, transferring money or property to a third party, or even creating false debt. The main objective behind these actions is often to reduce the apparent value of one’s assets, thereby influencing financial settlements or alimony payments in their favor.

Why Do Spouses Conceal Assets?

The motivations behind asset concealment are as varied as the methods used. Common reasons include:

  • Fear of Losing Assets: A spouse might fear that the legal division would result in a significant loss of their assets.
  • Resentment or Revenge: Emotions run high during divorces, and a spouse might hide assets out of spite or as an act of revenge.
  • Maintaining Lifestyle: The impending possibility of alimony or child support payments can motivate a spouse to misrepresent their financial situation to maintain their current lifestyle post-divorce.

Impact of Asset Concealment on Divorce Proceedings

Asset concealment not only undermines trust and transparency during divorce proceedings but can also have legal implications. Courts rely on complete and accurate financial disclosures to ensure a fair division of assets. When a party engages in deceit, it jeopardizes the integrity of the process and can lead to legal penalties, a reevaluation of asset division, or even grounds for a lawsuit.

Detection and Addressing Asset Concealment

Spotting hidden assets requires a keen eye and sometimes professional assistance. Detailed financial investigations, reviewing tax returns for discrepancies, and employing forensic accountants are among the steps one can take to unearth concealed assets. If you suspect your spouse of asset concealment, it’s key to consult with an attorney who can guide you on the necessary measures and potential legal remedies available to you.

Signs and Red Flags

As you journey through your divorce, stay vigilant. A sudden, inexplicable change in financial behavior may be the first hint of deceit. You might notice hidden assets, unexplained transactions, or a curious understatement of certain assets. In some instances, your spouse may even exaggerate debts. If financial documents start to go missing, or your partner becomes reluctant to share them, these are potential red flags you shouldn’t overlook.

Legal Implications of Asset Concealment in Maryland Divorce Proceedings

In Maryland, financial deception is not taken lightly. When presented with evidence of fraud, courts will ensure that the wronged party is treated fairly. This not only impacts the division of assets but can also affect grounds for divorce. Anyone found guilty of this form of deception may face severe consequences that could significantly influence the divorce’s outcome.

Legal implications can include: 

  • Contempt of Court
  • Revision of Asset Division
  • Adverse Inferences
  • Attorney’s Fees and Costs
  • Impact on Alimony and Child Support
  • Civil Fraud Implications
  • Perjury

Steps to Take if You Suspect Asset Concealment

If alarm bells are ringing, act promptly. Asset concealment during divorce proceedings can deeply affect the outcome, resulting in unfair settlements and increased animosity between parties. It’s essential to approach the situation diligently and systematically if you suspect your spouse is hiding assets. Here are 10 things you can do to help you through this sensitive issue.

  1. Document Everything: Start by documenting any suspicious activity or irregularities in your financial statements. This can include sudden large withdrawals, unfamiliar expenses, or newly opened accounts. Gathering concrete evidence can form a robust foundation for any subsequent legal actions.
  1. Consult with an Attorney: It’s imperative to discuss your suspicions with a knowledgeable attorney who can guide you on the best course of action. They can provide valuable insights into the legalities surrounding asset concealment, helping you comprehend your rights and potential remedies.
  1. Employ a Forensic Accountant: A forensic accountant specializes in reviewing and analyzing financial records for evidence of deception. Their expert eye can pinpoint discrepancies in financial statements, track hidden assets, and ensure the financial aspects of the divorce remain transparent and accurate.
  1. Review Tax Returns: Tax returns can offer a treasure trove of information. Comparing the income declared on tax returns with lifestyle expenses and known assets can sometimes reveal disparities. Look for undisclosed income or properties, which can indicate potential concealment.
  1. Monitor Credit Reports: By regularly checking your credit reports, you can identify any unfamiliar accounts or financial activities. This step is particularly vital if you and your spouse have joint accounts, as they might open new lines of credit without your knowledge.
  1.  Scrutinize Property Transfers: Look out for any properties transferred to family members or close friends at below-market prices. These transactions can sometimes be a ruse to hide assets, with plans to reclaim them post-divorce.
  1. Be Wary of Business Assets: If your spouse owns a business, they might use it to shield personal assets. Practices like delaying business contracts until after the divorce or paying salaries to non-existent employees can artificially decrease the business’s value.
  1. Investigate Digital Trails: In today’s tech-driven world, many financial transactions leave a digital footprint. Check shared computers or devices for evidence of financial software, dealings, or communication with unknown financial institutions.
  1. Open a Line of Communication: While it might be challenging, consider discussing your concerns directly with your spouse. Sometimes, misunderstandings can lead to suspicions, and open communication might help clarify doubts. However, approach this step with caution and preferably under the advice of your attorney.
  1. Protect Your Own Assets: Finally, safeguard your assets by considering opening individual accounts, changing online banking passwords, and ensuring you have full access and control over your personal finances.

The Role of Maryland Family Law and the Courts

Maryland’s Family Code provides clear guidance on Asset Concealment during divorce proceedings. When there’s concrete evidence of deceit, the courts have measures to ensure justice is served. The Law Offices of Tina Sharma are here to help you navigate these legal waters, ensuring your rights and assets are protected.

Contact our office today.