Asset hiding is one potential issue that can plague couples throughout their divorce. But why exactly do people engage in this?
Moreover, what happens to someone who attempts to hide assets and gets caught?
Active asset-hiding tactics
First, it is important to watch for two different types of asset hiding: passive and active. Active asset hiding is what can get people into serious trouble.
When a person actively hides assets, they go out of their way to ensure that either the source of the asset or the asset itself is obscured in some way.
For example, a person may hide an income asset stream by asking for payment in cash, or opening up a hidden bank account to have paychecks deposited into. Someone may hide assets directly by transferring asset types, i.e. buying land with the intention of selling it again later.
Understanding passive asset hiding
Forbes reminds individuals to check for passively hidden assets, as well. These are assets that a person does not have to work to hide. In most cases, they are assets that a person simply does not think about often, such as country club membership or airline mileage.
When hiding passive assets, a spouse simply does not alert their partner to the asset. They may attempt to sell the asset off without their spouse’s knowledge, or transfer it to their own personal name or account instead of a shared or joint account.
After noticing attempts at hiding assets, it is possible to take action and take steps to get a proper division of assets.