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3 facts about trying to hide assets during a Minnesota divorce

On Behalf of | Sep 9, 2020 | Family Law

Financial disagreements are often at the root of marital issues, and during divorce those disagreements may lead to intense anxiety, fear and resentment about an anticipated court-ordered division of money and property.

Many divorcing spouses find it tempting to try to hide assets from their partner and from court scrutiny. However, doing so may not only result in an unfavorable settlement for the deceiving partner, it may lead to additional monetary penalties or even imprisonment.

1. Automatic temporary restraining orders limit financial activity

In Minnesota, initiation or receipt of a divorce action triggers an automatic temporary restraining order that limits the financial activities of both spouses until reaching a final settlement. Except for necessary, usual transactions, the ATRO prohibits each spouse from buying, selling or transferring assets, modifying insurance policies or even making large, unnecessary purchases.

2. There are many methods of hiding assets

There are many ways that a divorcing spouse may try to shield assets from division and elude the restrictions of an ATRO. In addition to transferring property to a third party or claiming an asset was either lost or does not exist, a spouse may underreport income, create false debt, delay a promotion or bonus or make extravagant purchases in cash.

3. There are many ways to discover hidden assets

During a contested divorce both spouses have a legal obligation to fully disclose all assets, including both separate and marital property, income, expenses and debt. An opposing attorney may employ a wide range of methods to discover any assets that the other partner attempt to hide, including document subpoenas, depositions and consultation with a forensic accountant.

Presenting false financial information may not only lead to stiff fines or imprisonment, it could impact the court’s decisions about dividing marital property and determining support and custody arrangements.