How Does Hiding Assets Complicate Divorce in Ohio?
Under the Ohio Revised Code, Section 3105.171, all marital property is subject to equitable distribution in a divorce. Marital property includes all real and personal property acquired by either or both spouses during the marriage. With equitable distribution, all marital assets are distributed fairly between the parties, but not necessarily in a 50/50 split. Both parties are required by law to disclose all assets and debts during divorce proceedings. Divorce can be a complex and stressful process under any circumstances. When one party conceals assets from the other, not only is it illegal, but it can also make divorce proceedings more contentious, complicated, lengthy, and costly.
What Is the Motivation for Hiding Financial Assets in a Divorce?
The motivation for hiding assets in a divorce is to keep those assets from being included in the marital property and divided between the parties. It is an attempt by the spouse who concealed the assets to obtain a more favorable financial outcome in the divorce. Financial assets hidden during divorce proceedings could be any type of income, property, or resources. They may include cash, investments, real estate, bank accounts, or other items of value.
What Are Some Common Tactics for Hiding Assets in an Ohio Divorce?
Divorcing spouses may attempt to hide financial assets using various tactics that may include the following:
- Transferring assets: A common tactic is to transfer property or assets to friends, family members, or other third parties, with the intention of reclaiming them after the divorce is finalized.
- Underreporting income: A spouse may fail to report cash payments, underreport income from a side business, or defer bonuses or raises until after the marriage is terminated.
- Hiding physical assets: A party to a divorce may conceal items of value, such as artwork, jewelry, or collectibles, or purchase new valuable items in someone else’s name.
- Overpaying debts or taxes: While a divorce is pending, a spouse may use existing cash to overpay debts or taxes with the intention of receiving a post-divorce refund. This can be an effective way to hide cash reserves until after the divorce.
- Misrepresenting debt: One way to reduce the apparent net worth of marital assets and the share received by a spouse is to fabricate debts or exaggerate the amounts of existing debts.
What Are the Strategies for Detecting Hidden Financial Assets?
A thorough and systematic approach can detect assets your spouse is attempting to hide. The following strategies are commonly used to reveal hidden assets:
- Discovery: In an Ohio divorce or any civil action, discovery is the process in which information is exchanged between the parties. It may involve interrogatories (lists of questions sent to the opposing side); requests for production of documents (such as tax returns, mortgages, property appraisals, retirement accounts, credit card statements, etc.); requests for admissions of fact (which may either be admitted or denied); subpoenas (to obtain documents and/or testimony from third parties); and in some cases, depositions, in which a person is required to answer questions under oath.
- Public records search: A thorough search of public records may reveal hidden business interests, real estate holdings, or other undisclosed assets.
- Forensic accounting: Professional forensic accountants are specialists in investigating financial records. They analyze income streams, expenditures, and asset transfers to identify discrepancies and inconsistencies and uncover hidden assets.
- Digital forensics: The National Institute of Standards and Technology defines digital forensics as “the application of computer science and investigative procedures involving the examination of digital evidence…” It involves examining social media and other online accounts, emails, and electronic devices to obtain evidence of financial transactions or hidden assets.
- Lifestyle analysis: A comparison of a soon-to-be-ex-spouse’s lifestyle against their reported assets and income can reveal discrepancies that may indicate undisclosed assets.
What Are the Consequences of Hiding Financial Assets in an Ohio Divorce?
You have legal recourse if you discover your spouse is hiding assets and produce evidence to prove it. A party who attempts to hide financial assets in a divorce may face any of the following consequences:
- Sanctions: The court may impose sanctions, which may include attorney fees and fines, on a party who attempts to hide assets in divorce proceedings.
- Contempt of court charges: The judge may find a party in contempt of court for deliberately hiding assets. This can mean additional penalties or even jail time.
- Other criminal charges: When hiding assets involves fraud or other illegal activity, it can lead to criminal charges against the offending spouse.
- Redistribution of assets: If it is discovered that a spouse attempted to conceal assets, the court may redistribute assets more favorably to the other spouse as compensation.
- Modification of divorce settlement: What happens if hidden assets are discovered after the divorce is finalized? In that case, the court may modify the divorce settlement accordingly.
What Is the Best Way to Proceed if You Believe Your Spouse Is Hiding Assets?
If you are going through a divorce and suspect your spouse of failing to disclose financial assets using any available tactics, your best course of action is to speak with an experienced Ohio divorce attorney right away. Our seasoned trial attorneys at Lawrence Law Office have the knowledge, skills, and resources to guide you through the process and protect your rights. Taking proactive measures and using the most effective strategies, we can help account for all marital assets to ensure your final divorce settlement is truly equitable. Call us today at 614-363-1273.
