Divorce can be a complex and emotionally charged process. Unfortunately, it’s not uncommon for one spouse to attempt to conceal assets in order to avoid sharing them fairly. Whether it’s out of fear, resentment, or a desire to maintain financial control, hiding assets during a divorce is both unethical and illegal.
Our legal team is experienced in identifying discrepancies, uncovering hidden financial information, and ensuring that all marital property is disclosed and divided according to the law. If you suspect that assets are being concealed, we’re here to help protect your rights and secure a fair outcome.
Assets Must Be Reported
According to Colorado law, spouses must affirmatively report all their assets, debts, expenses, and income. Marital and separate property [RH1] must be accounted for – in full and completely. When it is submitted to the court, each of the spouses is attesting to the truth of the filing.
Falsifying the value of an asset, hiding an asset, and/or simply omitting an asset is, in effect, perjury. This is not a gray area, it is the law.
It should be noted that when hidden assets are found, the court may assign greater benefits to the other party, and the person who hid the assets could be found in contempt – which could result in a fine and/or a jail sentence.
How Assets Are Hidden
As you can imagine, there are innumerable ways for a motivated person to hide assets. These are some of the more common methods:
- Overstating expenses and debts and understating income.
- Real estate offers many opportunities for hiding assets, and it’s frequently the place where people are caught ‘cheating the system.’ Loans can be taken out, deeds retitled or signed over to partners or relatives, rental properties devalued or allowed to go vacant during the divorce, and much more.
- Overpaying the IRS. This may seem counterintuitive, but it is hardly uncommon and can have real value down the road. The IRS is overpaid on purpose and a 1040 box is ticked off – the one that asks that the overpayment be applied to future tax bills.
- ‘Repaying debts’ to family and/or business associates.
- Maintaining individual banking/brokerage accounts and keeping the statements hidden.
- Hidden credit cards.
- Lending or giving money to friends, relatives, and/or business associates.
- Making big-ticket purchases and undervaluing them. For example, buying an expensive item (or more) and then promptly acting as if they are far less valuable than they are, all while knowing they will be able to resell the items later and get their money back or even make a profit.
- Digital Assets. Cryptocurrencies are no longer new and untried. They are far more prevalent, if not less volatile. They do not involve accounts in an individual’s name. Instead, they utilize blockchain records for transactions.
Colorado Divorce Attorneys
Halligan LLC has a great deal of experience working with forensic accounting firms to uncover any assets that have been hidden from the judicial process during a Colorado divorce.
Halligan LLC has had great success in their clients finding and presenting hidden assets to the courts so that they could and were fairly adjudicated. Sometimes, a spouse will not find hidden assets until after a divorce is final. Colorado allows a five-year window to seek relief if hidden or undisclosed assets are discovered.
It’s important, of course, to begin any search for assets you believe may be hidden as soon as you feel you have a reasonable suspicion it may be happening. Talk to us.
