In a divorce, not only is there a division in the family but also a division in assets. During the proceeding, one of the things that you will have to discuss is marital asset distribution. The purpose of this is to ensure equal distribution of marital assets between spouses. Unfortunately, some spouses hide, sell or even waste assets to prevent the other spouse from getting their fair share.
Hiding marital property is illegal
Hidden assets are marital assets hidden by one spouse without the knowledge and approval of the other spouse.
Under New York divorce law, the court requires spouses in a divorce proceeding to declare and submit all necessary documents regarding their income, debts and assets and they will be put under oath doing so.
Failure to disclose assets or to lie under a sworn statement can result in severe consequences and might cost the guilty party more in litigation fees than if they properly disclosed the assets in the first place.
What happens if the court finds out?
If the court finds out or has a suspicion that one of the spouses is engaged in unethical and illegal acts, they may place a temporary restraining order (TRO) on both spouses at the beginning of a divorce proceeding. The TRO will prevent either spouse from moving the marital assets and properties.
Moreover, if the court finds one of the spouses guilty of hiding assets, it can order the guilty spouse to transfer the assets back to the marital estate in restitution to the other spouse. If it is no longer possible to find or restore the property, the court will assess the asset's value and reduce the guilty spouse's marital estate share by the asset's value. In extreme cases, the court can hold the spouse in contempt of court which could potentially lead to a jail sentence.
Dealing with assets, especially in a divorce proceeding, is very tricky. Uncovering assets may not be easy but knowing that this kind of thing happens and being aware of the consequences can prove helpful during the process.