When a couple gets divorced, both parties are often asked to inventory their assets to determine what is joint property and what is separate property. Joint property may include assets such as equity in a marital home, the value of a retirement account or anything else acquired during the marriage. What happens if one party refuses to provide a full and accurate disclosure of their finances?
A Judge May Compel That Party to Provide Documentation
A judge is well within his or her rights to take steps to ensure that all parties comply with financial disclosure requirements. In some cases, it may be possible for that person to be in contempt of court, which could result in several days, weeks or months spent in jail. Typically, the contempt charge is only dropped when the individual complies with an order to provide required information.
Failure to Cooperate Could Result in Unfavorable Future Rulings
Ideally, a couple will work out for themselves how to split property and whether or not either spouse is responsible for child support or alimony. This is because the couple understands their own needs and may find it easier to support each other or their children in a less formal manner.
However, if a judge needs to decide matters such as spousal and child support, he or she will not take kindly to those who deliberately try to circumvent the process. Therefore, it is possible that an individual who fails to provide documentation in a timely manner may receive an unfavorable ruling from that judge.
For instance, the person asking for child or spousal support may be granted those requests against the wishes of the party who failed to provide full financial disclosure. It may also be possible that spousal or child support is based off of a putative income as opposed to whatever limited information has been provided to the court.
Your Attorney May Ask for an Order Freezing Assets
One common reason why an individual may not provide full financial disclosure is because he or she is dissipating assets. What this means is that he or she is either spending money or getting rid of assets in an effort to reduce what the other spouse may be entitled to during the property division process.
An attorney may ask for an order that puts a halt to any type of asset dissipation or any other transfer or depletion of assets. Those who believe that his or her spouse may be trying to waste assets or otherwise obscure the true value of an asset may wish to check credit card or bank statements for evidence of recent transfers.
While it may be impossible to get back money already spent or assets already sold, it could prevent assets from being depleted going forward. This may help an individual solidify his or her financial situation after the divorce or at least ensure that he or she is negotiating from a position of relative strength moving forward.
An Attorney May Hire Outside Experts to Find Hidden Assets
In the event that an individual is trying to hide assets, an attorney may hire forensic accountants or other experts to find those assets. It may be possible to review bank statements to find transfers to other accounts that an individual may have kept secret or that may belong to close friends or family members.
Evidence may also be found to support suspicions that a business may have been sold or gifted to another party to avoid being split in a divorce. Assets from a business may also be transferred to shell companies or other entities in an effort to keep them hidden or out of reach of the other spouse. In such a scenario, they may be included for property division calculations regardless of who the legal owner of those assets may be.
If an individual fails to provide financial disclosure or other types of paperwork, it could result in negative consequences for that person. A judge may issue a contempt of court ruling or otherwise rule against that person in the final divorce decree. Your attorney will likely pursue the matter vigorously to ensure that your rights are protected throughout the divorce process.