When it comes to divorce in Massachusetts, everything related to finances must be fully disclosed. This includes every single asset, purchased together or otherwise, as well as all accumulated debts. Each spouse is instructed to report known findings through a financial (statement) affidavit. The financial statement is signed under the pains and penalties of perjury and is one of if not the most scrutinized documents filed by each party in divorce litigation.
It is against the law to purposely hide, understate, or overstate assets, as well as any marital property, debt, income, or expense.
If you suspect your spouse of attempting to hide assets, it’s imperative to retain a divorce lawyer who has significant experience discovering hidden or undervalued assets. A top-notch Massachusetts divorce lawyer will know the tricks used to hide assets and if necessary, work with forensic accountants, investigators, and other experts to uncover these attempts to mislead the system.
Some common methods of hiding assets are outlined below.
Overpaying the IRS
Spouses who anticipate that their divorces will be finalized during the next tax season have been caught intentionally overpaying the IRS. If undetected, this gives them a way to shelter money and provide them with a head start on the following year’s taxes once the divorce becomes final.
Selling Assets to Friends
Be wary of transactions made between a spouse and a close friend or confidante. This is a tactic commonly used to hide assets whereby an arrangement is made to return or ‘sell back’ assets following divorce finalization.
Delaying Financial Gains
It is not uncommon for a spouse expecting a large commission, promotion, or pay raise to postpone the financial distribution until after the divorce is final.
Additional attempts to hide assets to watch out for include:
- Transferring money from a joint account to an individual one
- Putting assets into a family trust, offshore corporation or shell corporation
- Purchasing art, collectibles or other items that retain value but are not liquid
- Purchasing insurance policies, cashier’s checks, and savings bonds
Keep in mind that Massachusetts is an “equitable division” state when dealing with property division. This means all assets and debts must be identified, valued, and divided. Equitable division, however, does not mean all assets and liabilities will be split evenly between parties. Arguments can be made in court as to why and how certain assets should be divided.
Efforts to conceal financial gains can become more sophisticated with high-net-worth divorces. Due to the complexities surrounding asset division, it is imperative for anyone going through a divorce in Massachusetts to seek out legal representation. Our team of experts can guide you through every step of your divorce.