When divorcing partners share feelings of bitter animosity, resentment and mistrust may easily lead either spouse to make emotional decisions that are not truly in their best interest. One of the most common mistakes that individuals make is attempting to hide assets in an effort to avoid sharing it with their future ex-spouse.
It is important for separating partners to know that they have a legal obligation to provide complete disclosure of all assets and liabilities, including income, property, debt and expenses, during the divorce process. Falsifying or withholding financial information is a serious offense that may lead to stiff monetary sanctions, additional assets awarded to the other spouse or even imprisonment.
How do individuals try to hide assets?
There are numerous ways that divorcing partners attempt to shield their true financial position from the court. Some of the most common include:
- Transferring assets to a third party
- Purchasing expensive items with cash
- Denying an asset exists
- Claiming loss of an asset
- Underreporting income
- Creating false debt
From bank statements and tax returns to social media activity and other electronic information, these types of actions are bound to leave a trail of incriminating evidence for an opposing divorce attorney, private investigator or forensic accountant.
What are automatic temporary restraining orders?
Another common mistake that individuals make is attempting to transfer or spend assets soon after the divorce process has begun. In Minnesota, a divorce summons initiates an automatic temporary restraining order that applies to both parties. The ATRO prohibits either partner from making any major changes to their financial situation until the finalization of the divorce. This may include selling or transferring property or other assets, changing bank accounts, modifying insurance policies or even making unnecessary purchases.
When emotions are running high, it can be easy to lose sight of the bigger picture. It is important that individuals facing divorce realize that being honest and open about all assets is essential for ensuring a fair outcome and avoiding potential legal consequences.