Partner
It might sound very appealing to attempt to conceal assets when you are either contemplating or in the midst of a nasty divorce. Emotions will undoubtedly be running high, with possible bitterness in the mix. However, concealing assets during a divorce in New Jersey is not only unethical but also illegal and can lead to severe consequences for the party attempting to hide assets. This requirement is crucial for ensuring the court can make a fair and equitable distribution of marital property. Failure to disclose assets is considered fraud and is taken very seriously by the courts.
Legal Framework In New Jersey
In New Jersey, like in most jurisdictions, the divorce process requires full financial disclosure from both parties. This disclosure includes all assets, liabilities, income, and expenses. New Jersey follows the principle of equitable distribution, which doesn’t necessarily mean equal but rather what is fair considering various factors such as the duration of the marriage, the standard of living during the marriage, each party’s financial circumstances, and more.
Methods of Concealing Assets
Concealing assets can be attempted in several ways:
- Underreporting income: Not disclosing or lying about the actual income on financial statements.
- Overstating debts: Claiming higher debts than what exists to reduce perceived net worth.
- Undervaluing assets: Reporting assets at a value much lower than their actual market value.
- Transferring assets: Temporarily transferring assets to friends or family members to remove them from the marital estate.
- Stashing Cash: Keeping large amounts of cash hidden, which is not reported in the financial disclosure forms.
Detection of Concealed Assets
Discovering concealed assets has become more feasible with technological advances and financial scrutiny. Divorce attorneys and forensic accountants have several methods to uncover hidden assets, including:
- Subpoenaing Financial Records: Obtaining comprehensive financial records from banks, investment firms, and other institutions.
- Forensic Accounting: Analyzing financial statements, tax returns, and other documents to trace discrepancies or unusual transactions.
- Depositions: Conducting detailed questioning of both parties under oath to uncover inconsistencies in their financial disclosures.
- Lifestyle Analysis: Comparing reported income and expenses to the actual lifestyle and spending habits to identify potential underreporting.
Legal Risks and Consequences
The risks of concealing assets are substantial:
- Legal penalties: If discovered, the court may impose penalties, fines, or criminal fraud charges.
- Adjustment of settlements: Concealing assets can lead to an unfair distribution of property, which could be substantially rectified if discovered. The court may adjust the division of marital property to favor the innocent party, potentially awarding them a larger share of the marital estate.
- Damage to credibility: Once a party is found to have been dishonest about one aspect of its financials, the court may scrutinize all its submissions more closely, leading to general mistrust and potentially unfavorable rulings in other areas, such as custody or support matters.
- Contempt of Court: Concealing assets can result in a contempt of court charge, which can include fines or even jail time.
Ethical and Emotional Considerations
Beyond legal implications, concealing assets can severely damage the relationship dynamics between the divorcing parties. In a process already fraught with emotional stress, adding deceit can cause long-term harm to any remaining goodwill, which can be particularly detrimental if children are involved and co-parenting is necessary.
Takeaway
Seeking the assistance of an experienced family law attorney can help navigate the complexities of financial disclosure and protect one’s interests without resorting to deceitful practices. Contact Bozanian McGregor LLC for an initial consultation. We have dedicated, compassionate attorneys who will help ensure that you are treated fairly during an emotional time in your life.