Connecticut divorce: uncovering hidden assets and undisclosed income
On behalf of Robert Skovgaard
The law requires complete disclosure of property and income in divorce, but not all spouses comply.
Sadly, unfaithfulness in marriage is not only personal, but also financial, in many cases. So-called financial adultery is important to uncover in a divorce because without a true accounting of a deceitful spouse’s income and assets, the other partner cannot get an equitable property division, as required under Connecticut law.
In addition, a spouse who has hidden assets or understated income will likely owe less child support and alimony than Connecticut family law would otherwise order him or her to pay in a divorce.
Financial deception may be a way of life
The National Endowment for Financial Education or NEFE commissioned a Harris Poll in 2016 about financial infidelity in committed relationships. Significant findings include:
- Two out of five Americans admit to having committed financial infidelity in a current or past relationship.
- Almost 40 percent of surveyed individuals had hidden a bill, cash, bank account, purchase or statement from their partners.
- More serious deceit like misrepresenting debt levels or income amounts was admitted to by 16 percent.
If the numbers look this bad during relationships, imagine when a marriage has broken down and a dishonest partner faces permanent obligations or property division the likelihood of continuing to falsely report on financial matters. For this reason, it is important for the other spouse to retain a lawyer in divorce who has experience uncovering hidden assets and unreported income, especially in high-asset families.
A divorce attorney who regularly works to uncover assets of an opposing party may involve other professionals like private investigators, computer specialists or forensic accountants to assist in the effort. Of course, legal counsel should conduct vigorous and methodical discovery in the divorce proceeding.
Common methods of hiding assets
Of course, people can be very creative in finding ways to hide property, money, business interests and investments. Some of the more common methods include:
- Using separate bank accounts that are not held jointly
- Creating business entities like corporations, but funding them with personal assets
- Setting up trusts to hold personal assets
- Using secret offshore accounts
- Making secret investments
- Transferring assets to relatives or friends to hold
- Buying expensive personal property like antiques, jewelry, cars, yachts, coins and more and keeping it concealed, sometimes in safe deposit boxes
- Purchasing secret real estate
- Not reporting executive perks like bonuses and stock options
- Falsifying records
- Hiding cash, bonds, insurance policies, stocks, retirement accounts and other liquid or near liquid assets
- And many more
Clues that assets are hidden
There are many ways to uncover hidden property, money, investments and other assets. For example, tax returns should be meticulously reviewed. Financial accounts records may show unexplained withdrawals or deposits. A spouse’s lifestyle may not reflect the level of income he or she reports. Public property records can reveal real estate and other titled assets. Many other methods of investigation are available, depending on the circumstances.
Stamford family attorney Robert Skovgaard of the Law Office of Robert A. Skovgaard represents spouses in divorce throughout Fairfield County.