orce

Maryland is an equitable distribution state for allocating marital property in a divorce. This means that your marital assets will be equitably divided if you decide to end your marriage. Equitable distribution does NOT mean that your assets will be divided on a fifty-fifty basis. Instead, the judge will take a look at all relevant factors, including a spouse’s financial and non-financial contribution to the family and length of the marriage. 

Note that the requirement that property be distributed equitably only applies to marital property. This includes real estate held as tenants by the entirety and any other property acquired by one or both spouses during the marriage. Some assets qualify as “separate” property and are not subject to division in a divorce. Separate property can include inheritances, gifts from third parties, property that is subject to a prenuptial agreement, and other categories of property. 

These are other factors that are often considered by the judge in an equitable distribution:

• The total value of each spouse’s separate and marital property interests
• The spouses’ respective anticipated economic circumstances post-divorce
• Each spouse’s effort expended in accumulating marital property
• Each spouse’s age, physical condition, and mental condition
• Whether either spouse will receive alimony after the divorce
• Whether one spouse will continue to live in the family residence with primary custody of the spouses’ children post-divorce

In many cases, the parties are relatively transparent regarding their assets. However, this is not always the case. And if some assets aren’t disclosed by the parties and known to the court, they cannot be included in the allocation. 

Why do some spouses hide assets? Sometimes it’s as straightforward as one party never having disclosed the asset, and wondering why he or she must do so now. In other situations, a party might vindictively want to deprive the spouse of something he values. Sometimes, a spouse will gift a treasured object to a family member with the understanding that it will be returned once the divorce is final. The problem with all of these scenarios is that they result in the judge having an incomplete or incorrect picture of the divorcing couple’s financial status, and that will adversely affect alimony and child support decisions. 

How to Search For Hidden Assets

It is imperative that all assets be identified and accounted for prior to the legal allocation process. What can you do if you suspect that your spouse has hidden assets? Here are several steps that a Bethesda divorce attorney recommends if you feel that your soon-to-be ex-spouse is withholding some assets from the inventory. 

One of the most effective ways to uncover hidden assets is to use your knowledge of your spouse’s spending habits. Over the course of your marriage, you have likely identified, in a general kind of way, your spouse’s purchasing practices. Some people have compulsive buying behavior. Some individuals are prone to purchasing the latest versions of cellphones and other digital devices. Others are triggered to buy while on vacation.  If your spouse’s inventory seems out of balance with what you know of his or her spending habits, it could be a sign of hidden assets. 

Review Bank Accounts and Credit Reports

Review your joint accounts – checking, savings, investment – and look for activity that is suspicious or out of the ordinary. This could include account transfers or unusual deposits. Also check credit reports, and see if any new lines of credit have been opened. It’s a good idea to check your partner’s credit report as well. This will show any new debts taken on after filing for divorce which could also point toward hidden assets being transferred elsewhere.

Check Public Records

Public records are a treasure trove of information. If your partner has a business or international investments, it’s possible to uncover hidden assets by reviewing public records such as real property records. These types of assets can be highly valued and need to be accounted for during the divorce proceedings.

Review Tax Returns

If you don’t file your taxes jointly, it’s important to review your partner’s tax returns from recent years. This will provide valuable insight into income levels and expenses incurred over the past few years, and can help determine if there have been any large sums moved around without disclosure during the divorce proceedings. In particular, pay close attention to income and dividend activity and the sale of investment assets.

Hire a Forensic Accountant

If you believe your spouse has hidden assets, it’s possible to hire a forensic accountant to examine your financial records. They are trained to figure out where missing money has gone, how it was moved, and how it may be recovered. 

Ramifications of Hiding Assets

Hiding assets during a divorce proceeding is tantamount to contempt of court. The judge has many remedies if hiding assets is proven, including ordering a greater property award or alimony to the other party, imposing fees, and even imposing criminal sanctions for fraud. 

If the hidden assets are discovered after the divorce is finalized, the case may be reopened and the court’s orders reviewed and recast. As is the case when the fraud is discovered during the divorce proceeding, the party who engaged in the fraudulent behavior may be subject to fines and sanctions, legal fees, and even criminal charges. 

Contact the Offices of Brandon Bernstein Law, LLC

One of the major points of contention in many divorces is the division of marital property and financial assets. In the case of a difficult divorce, one spouse may vindictively try to deprive the other of their share of the marital property. Or a spouse may think they have a stronger claim to certain assets than the other marital partner does.

At the law offices of Brandon Bernstein Law, LLC, we have many years of experience helping divorcing parties get to a reasonable solution on property distribution issues. Contact us today for a free consultation.