When going through a divorce, one of the most important aspects of this process you must keep in mind is the importance of financial transparency. Not only does this help ensure that you and your spouse can divide assets fairly based on New York’s distribution process, but it also helps ensure you can receive the correct support payments. However, if you have reason to believe your ex-spouse is concealing assets in order to spend less on matters like alimony or child support, it can be incredibly frustrating. As such, it’s in your best interest to continue reading and connect with a Nassau County divorce lawyer to explore your legal options during these difficult matters.
Why Is Financial Transparency Important in a New York Divorce?
In accordance with New York DRL § 236, marital property is subject to the equitable distribution process. Essentially, this means that both spouses must fully disclose all assets in order for the court to accurately divide property between the spouses. Equitable distribution means that assets will be divided fairly between the spouses, rather than an automatic equal split of the property.
As such, when one spouse conceals or manipulates assets or income, it undermines the court’s ability to accurately determine how to divide property, while also impacting matters like alimony and child support.
Failure to abide by the courts’ full financial disclosure laws isn’t just unfair, but can also result in a number of legal penalties and potential intervention.
Why Might an Ex Hide Property?
Generally, the most common reason someone may hide assets as part of their divorce is to keep a larger portion for themselves in the hopes of receiving a financial advantage or reducing their domestic support obligations. While anyone can conceal property, these instances are more common in high-conflict divorces in Nassau and Suffolk counties.
Financial and Emotional Motivations
- Attempting to retain a larger share of marital property
- Acting out of anger or seeking “revenge” on their spouse
- Believing the hidden assets will not be uncovered by the courts
- Reducing how much they pay in alimony or child support
- Believing they “deserve” a better outcome than their spouse
Common Methods Used to Hide Assets During a New York Divorce
Courts on Long Island and throughout New York often encounter a number of methods used to conceal assets. As such, familiarizing yourself with these common tactics is critical to identifying when a spouse may be attempting to conceal assets so you can best protect your financial interests.
Frequently Used Methods of Concealing Assets
- Transferring money or property to friends and family until the divorce is done
- Underreporting income
- Intentionally delaying bonuses or commission
- Establishing trusts with funds to reclaim later
- Moving funds into offshore or hidden bank accounts
- Holding physical cash
- Manipulating business income
What Is Financial Disclosure and What Do the NY Courts Require?
Financial disclosure is a mandatory process in New York that requires both parties in a divorce to provide a comprehensive and accurate list of their finances. This includes their income, expenses, and liabilities. As such, this allows the courts to accurately identify marital property to divide assets in accordance with the equitable distribution standard.
Information You Are Required to Disclose
- Income from all sources
- Bank, retirement, or investment accounts statements
- Valuations for real estate and personal property
- Business interests
- Outstanding debts and liabilities
- Monthly expenses
What Should I Do if I Believe My Ex Is Concealing Assets?
If you believe your ex is concealing assets as a means of receiving a more favorable share of assets following the conclusion of your divorce or to avoid paying support, it’s critical to understand the steps you can take to fight for the funds you deserve. Additionally, courts take instances of financial dishonesty seriously, as it is used as a means of deceiving the courts. However, the burden of proof ultimately falls to you to show that your ex has intentionally concealed assets.
Immediate Steps to Protect Yourself
- Make copies of all financial records and transaction histories, including tax returns, bank statements, and prior financial disclosures
- Compare documents from your spouse’s prior tax returns to look for inconsistencies, unexplained transactions, or missing funds
- Avoid confrontation without legal representation, as your spouse may attempt to destroy evidence
- Consult an experienced attorney as soon as possible to assist with discovery and potentially connect with a forensic accountant
How are Hidden Assets Discovered in a Long Island Divorce?
Due to the nature of these matters, the courts have several investigative tools they can use to discover when a spouse is hiding or manipulating assets and property.
Methods Used to Uncover Financial Deception
- Formal discovery requests and subpoenas
- Depositions and sworn financial statements
- Lifestyle analysis compared to the reported income
- Forensic accountants
- Production of financial institutions’ records
Legal Consequences of Hiding Assets in New York
Though hiding assets may seem like a surefire way to receive a better outcome than a spouse, New York courts hold broad authority to penalize any dishonest or fraudulent conduct that occurs during a divorce. As such, a spouse who is caught concealing assets can face significant penalties.
Potential Court-Imposed Consequences
- Unequal distribution of marital assets to favor the honest spouse
- Being held in contempt of court
- Monetary fines and reimbursements
- Loss of credibility in other matters, like custody or alimony
Can You Take Action After a Divorce Is Finalized?
While it is possible to take action if you uncover fraud after your divorce has been finalized, the process can be incredibly difficult. Reopening a settled divorce case can be incredibly complex, requiring strong legal representation to help you fight for the justice you deserve.
Post-Judgment Legal Options
- Filing a motion to reopen the case
- Seeking compensatory damages for hidden assets
- Requesting the redistribution of assets by the courts
- Enforcing penalties for intentional misrepresentation or fraud
Contact an Experienced Long Island Divorce Attorney Today
As you can see, navigating these matters can be incredibly difficult. That’s why it’s in your best interest to connect with an experienced attorney with the Law Offices of Jay D. Raxenberg. Our team will do everything in our power to help you fight for the best possible outcome during these difficult times. When you need assistance, contact us to learn how we can guide you through these matters.
