Hiding assets is defined as one spouse reducing or concealing marital property to lessen the financial settlement during divorce. If one spouse is hiding assets in divorce proceedings, it can result in an unfair distribution of assets.
Florida divorce law is based on an equitable distribution of assets; therefore, any attempt at hiding or concealing marital assets can result in property and financial loss. The penalties for hiding assets during a divorce range from one spouse losing half or all the hidden assets to jail time due to perjury.
There are legal steps that can be taken if a spouse is suspected of hiding assets, such as identifying signs of concealed assets, gathering evidence, hiring legal representation, and protecting one’s financial interests.
What Are Florida’s Laws for Dividing Assets in a Divorce?
Florida law states that marital assets will be divided equally unless a judge determines that an unequal distribution is justified in a divorce. This can be found in 61.075 of the Florida Statutes. Section 61.075 also states that assets gained during marriage are considered marital property.
Unlike other states where marital property is considered community property and is divided equally, different factors may lead to an unequal distribution. In an equitable division of assets, both spouses must provide all financial records and note those as separate property to facilitate the legal process.
Is It Illegal to Hide Marital Assets in a Florida Divorce?
Yes, in the state of Florida, it is illegal to hide, conceal, or transfer marital assets, such as bank accounts, real estate, or retirement accounts, with the intent to avoid an equitable distribution before or during a divorce.
What Are the Penalties for Hiding Assets in a Florida Divorce?
The penalties for hiding assets in a Florida divorce include reallocation of assets, being found in contempt by the court, and charges of perjury.
Reallocation of Assets
The reallocation of assets is defined as the judge awarding more funds or marital assets to one spouse.
If an offending spouse is caught hiding assets in a divorce case, the judge determines how much of the hidden assets will be awarded to their ex-spouse.
In addition to losing either half or all of the hidden assets, the offending spouse must pay all legal fees, private investigator fees, filing fees, and other expenses both parties incurred.
Reallocation of assets begins with a discovery process, where both spouses work with a private investigator or family law attorney to discover hidden assets, if there are any.
This includes analyzing business records, marital estate, and financial statements. If an ex-spouse can uncover hidden assets, they must submit all relevant financial documents and evidence to the judge.
The judge then determines which property is marital or separate. Factors considered for awarding more hidden assets in divorce include the following:
- Financial circumstances of each spouse
- Duration of the marriage
- Whether a spouse supported the other’s career or education
- Interruption of career or education for the marriage
- Contributions made by each spouse, such as homemaking and childcare
- Whether child support payments are to be made
The judge decides on property division based on substantial evidence and assesses whether the opposing spouse may face criminal charges.
Contempt of Court
Contempt of court refers to any act committed by one party to obstruct or hinder any decree, order, or mandate given by the court.
Contempt of court can either be a civil or criminal charge. Civil contempt involves not following any orders given during the divorce proceeding, such as paying child support or custody orders.
Criminal contempt occurs when a party deliberately disrupts divorce proceedings, disrespects family law attorneys and the judge, or violates court rules.
The penalty for criminal contempt varies but often involves fines, imprisonment, or both, depending on the severity.
Hidden assets count as contempt of court and are more likely to be considered civil contempt.
Charges of Perjury
Perjury is the willful telling of an untruth after taking an oath. Concealing assets, lying about which assets are marital or separate property, or hiding a spouse’s financial affairs constitute perjury.
Unlike contempt of court, perjury is wholly a criminal offense.
Perjury is a criminal charge punishable by fines and up to five years in jail.
What to Do If Your Spouse Hides Assets in a Florida Divorce?
If a spouse is suspected of hiding assets in a Florida divorce, the following steps should be taken:
- Identify Signs of Concealed Assets
- Gather evidence of concealed assets
- Hire Legal Representation
- Protect Your Financial Interests
These actions help ensure a fair and equitable division of marital assets for both spouses in a divorce.
Identify Signs of Concealed Assets
The signs a spouse is hiding assets include unusually secretive behavior, particularly around financial information with marital funds during the divorce process.
The following are signs of a spouse concealing assets:
- Sudden Financial Secrecy: If a spouse is secretive about large amounts of assets like a retirement account, does not want joint accounts, removes their ex-spouse’s access to joint bank accounts, or hides money in a safe deposit box, it can be a sign that they are hiding assets.
- Overpaying Creditors or IRS: A spouse may intentionally overpay taxes or withhold excess from their paycheck in order to hide assets and transfer money discreetly.
- Unexplained Disappearance of Valuables: Hiding money, expensive jewelry, or furniture and claiming they were lost or stolen are ways to conceal assets.
- Large Gifts and Loans to Family Members: If a spouse begins giving large gifts or loans to a family member with the expectation that they will be returned or repaid after divorce, it can be a sign of a hidden asset.
- Unexplained Increase in Business Expenses: If a spouse owns a business, they may hide assets by inflating expenses or paying salaries to nonexistent employees. After the divorce settlement, they may delay signing deals to lessen the impact on business records.
If a spouse observes these secretive behaviors, their next best step is contacting a law firm and working with a divorce attorney to find hidden assets.
Gather Evidence of Concealed Assets
The evidence needed to show a spouse is concealing assets includes the following:
- Income Tax Returns: One can reveal hidden assets by reviewing tax returns from that year and looking for any assets they were unaware of. A spouse can contact financial institutions to gather the necessary documents.
- Bank Statements: Bank statements are helpful for finding hidden assets by listing all information about unusual deposits and withdrawals. For example, a spouse makes undisclosed personal loans or real estate expenditures to hide assets.
- Loan Applications: Reviewing loan documents, which demand transparency about a couple’s financial situation, aids in uncovering if a spouse is hiding marital assets.
- Credit Card Statements: These statements list all expenses that a spouse may be unaware of, like expensive gifts, loans, or an unexplainable increase in cash flow.
- Business Records: These records can show if a spouse is hiding cash through unusual behavior on business bank accounts or an increase in expenses or business income.
- Public Records: Real estate and vehicle purchases, listed in public records, serve as crucial evidence if the other spouse is unaware of these transactions.
Once enough evidence of hidden financial assets has been gathered, a spouse can hire a divorce attorney or other legal representation.
Hire Legal Representation
Hiring legal representation, such as an attorney or forensic accountant, helps manage and divide all assets acquired, including hidden ones.
Attorneys gather records and evidence to prove hidden assets, focusing on defending their clients in divorce proceedings.
A forensic accountant is both a private investigator and a financial expert. They track assets and can determine their value, when they were acquired, and identify other people involved, such as business partners.
Forensic accountants and attorneys serve clients by guiding them through the discovery process and ensuring an equitable distribution of assets.
Protect Yourself
To protect yourself financially, it is important to consider the following steps:
- Freeze joint credit cards, lines of credit, and loans
- Secure copies of important financial documents like bank statements and records
- Create an inventory of all property
- Keep non-marital property separate
- Sign a financial affidavit to prove truthful financial records
- Conduct a search in a tax assessor’s office