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Concealed assets and financial misconducts in high-net-worth divorces

On Behalf of | Jun 13, 2023 | Divorce |

Concealing assets and financial misconducts are typical issues in high-net-worth divorces. This type of misconduct involves hiding high-value assets such as luxury real estate, high-end vehicles, company shares, pensions, investments or any other assets during property division in a divorce. Naperville follows an equitable distribution system, meaning marital property should be split fairly during a divorce.

Detecting concealed property and uncovering financial misconduct in a divorce is, in most cases, a challenging process. Unearthing some hidden assets, such as offshore accounts, undisclosed businesses or valuable art collections may require the intervention of investigators and forensic accountants. 

Common ways through which assets are concealed in a divorce

Some of the tactics that one spouse or both may employ to conceal assets, especially in a high-net-worth divorce, include:

  1. Creating complex business structures: A spouse may intentionally create intricate business structures, including manipulating financial documents, transferring business assets to family members or exaggerating business expenses. This may make assets evaluation of assets during property distribution complicated.
  2. Concealing assets through offshore accounts: Offshore accounts are hard-to-trace financial entities that a spouse can use to hide assets. Other accounts that are hard to access and trace and may be used to conceal assets include digital assets and cryptocurrency.
  3. Lowering the value of assets: A spouse may intentionally undervalue property such as real estate and investments during the asset division.
  4. Intricate estate planning and trust: Finally, a divorcing spouse may create complex trust structures and estate planning methods to prevent adequate evaluation of assets.

These are common patterns, but they are not the only way to conceal assets.

Identifying hidden assets and financial misconduct in a divorce

Some of the methods used to uncover hidden assets in a divorce include:

  • In-depth review of voluntary disclosures: During the discovery process in divorce, each party is allowed to make some voluntary asset disclosures. It is vital for each spouse carefully inspect any asset disclosures to ensure that they are no voluntary errors or omissions.
  • Request involuntary disclosures: A divorcing party can request a full disclosure of the marital properties, such as estate or financial documents if they believe the other party is concealing some assets. This timely request is made during the discovery process and might require the expertise of a private investigator.
  • Conduct research: Websites and social media accounts can provide essential information, including details of other businesses linked to an individual. A divorcing spouse can use the internet to discover more about their partner and determine if they are being honest in their disclosures.

If you are navigating a high-asset divorce, consider consulting with a lawyer to determine if further investigation and follow-up are necessary to ensure all assets are accounted for and divided up fairly.