Hiding Assets

Hiding Assets

Arizona Courts encourage divorcing spouses to make mutually agreeable settlement decisions for the distribution of the marital property outside of court, but for spouses with considerable or complex assets, this can be challenging. Especially in contentious Divorces when a spouse may seek to hide assets. Whether you are seeking to settle your Divorce or are forced to go to Trial, spouses must accurately determine what assets are their separate assets that belong to them alone and which assets belong to the marital community and are subject to division. 

“Hidden Assets” refers to any asset, account, property, or valuable that one spouse fails to disclose during the divorce in order to keep it separate from the pool of community assets subject to division in a Divorce. A spouse’s Hidden Assets could be cash, bank accounts, investments, retirement accounts, valuables, real estate property, or business interests.

Some signs that a spouse is hiding assets are obvious, but many spouses use subtle means that may go unnoticed by an unwary spouse. Some signs of asset hiding in an Arizona Divorce include the following red flags:

  • An account with slowly diminishing funds.
  • Changes in a spouse’s typical spending habits, including sudden or slowly building increases or decreases in spending.
  • A spouse who suddenly ceases paying the bills.
  • Bills and account statements that suddenly cease to arrive in the mail or in emails.
  • A spouse making unusual loans or gifts to relatives and friends.
  • A spouse making extravagant purchases.
  • A spouse declaring a sudden unexpected drop in income during the divorce.
  • Your access to an account is suddenly blocked, the password has changed, or financial programs have been deleted from your computer.
  • Inexplicable withdrawals or transfer appear from joint accounts.
  • Discrepancies between tax documents and financial records and your spouse’s lifestyle.

Any of the above signs could signal that your soon-to-be ex-spouse is engaged in hiding or disposing of assets that you could rightly claim for equal distribution during the Divorce.

Under Arizona law, all divorcing spouses have the duty to fully disclose their financial information during the Divorce.  Arizona requires each spouse in a Divorce to submit a full financial disclosure during the Discovery and Disclosure period of the Divorce process. During this period, both spouses and their Attorneys review the other spouse’s financial Disclosure and may request further documents. The Disclosures should include all assets, debts, income sources, and other relevant financial circumstances. During this process, a spouse attempting to hide assets might do any of the following:

  • Report a lower income or fail to report bonuses, overtime, or commission.
  • Overstate their debts.
  • Transfer assets to overseas accounts or cryptocurrency.
  • Hide cash assets and valuables in a safe or safety deposit box.

Some spouses ask their employers or contractors to defer payments, salary, commission, and bonuses until after the Divorce is final in order to minimize the amount of income they disclose.

Uncovering a spouse’s Hidden Assets is a complex process. If you suspect a spouse of hiding assets, it’s important to speak to your Cantor Law Group Arizona Divorce Attorney during the Discovery and Disclosure process so your Attorney can file Motions to request appropriate documents. Additionally, your Attorney may consult with a Forensic Accountant who specializes in uncovering Hidden Assets. Your Attorney can also request an Injunction from the Court to freeze your spouse’s accounts to prevent them from transferring, concealing, or withdrawing assets until after Discovery and the distribution of marital assets.

When a spouse purposely hides, conceals, transfers, or disposes of assets during Divorce, they may face serious consequences. These could include the following:

  • Fines and penalties.
  • An order to pay the other spouse’s legal fees.
  • A judge’s decision to award more assets to your spouse.
  • Criminal perjury charges with jail time upon conviction.
  • Contempt of court charges.

Hiding Assets during an Arizona Divorce is a fraud on the Court. This is a serious offense in Arizona and can result in long-reaching consequences.