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  Is There A Penalty For Hiding Assets In Divorce?

Divorcing parents in attorney’s office, signing over previously concealed accounts.

Divorces can be complicated and filled with uncertainties and emotions, especially when significant assets are involved. There may be assets a spouse wants to keep in the event of divorce, which is why many purposely fail to disclose assets or finances in order to prevent their spouse from getting hold of them. However, no matter how tempting it may be, hiding assets can lead to some unwanted consequences. When the concealed assets are discovered, the spouse who has attempted to subvert the legal process may lose their credibility in the eyes of the court, in addition to facing a penalty for hiding assets in divorce. If you are contemplating a divorce or are already in the process of ending your marriage, you might want to speak with an attorney to learn how you can protect your assets and finances without breaking the law in the process. The family law attorneys at Friedman & Bresaw, PLLC, guide individuals seeking a divorce through the divorce process in New Hampshire and help them protect and retain as many of their assets as possible. Call our Meredith office at (603) 707-4800 to schedule a free consultation. 

Why Do Spouses Hide Assets and Income in Divorce?

Under Title XLIII, Chapter 458 of the New Hampshire Revised Statutes, family law judges in this state follow the concept of “equitable distribution” when it comes to dividing property between spouses. The term “equitable” should not be confused with “equal.” In fact, it is quite rare for New Hampshire courts to divide marital property in an equal, 50/50 manner as there is a wide range of factors taken into account to ensure that the division is fair and just given the couple’s unique circumstances. 

Disclosure of Assets Requirement

When getting a divorce, both spouses are legally required to make a full and honest disclosure of their assets. When signing the divorce papers, both parties confirm that the information they provide is true and correct to the best of their knowledge. However, this requirement does not stop some spouses from attempting to hide assets and income when getting a divorce. 

Incentives for Concealing Assets

Common reasons why someone would want to conceal assets in divorce include:

  • Keep more to themselves. In most cases, the main motivation behind hiding assets in divorce is that a spouse wants to keep more to themselves. By not disclosing certain assets, a spouse can avoid having them included in the property division process. This – at least in theory – can result in them getting a larger share of the property. 
  • Avoid paying alimony. Often, the higher-earning spouse may attempt to hide their income and finances from their spouse and the court system in an attempt to lower their spousal support obligation or avoid paying alimony altogether. This strategy would allow them to argue that they lack the financial means to support their former spouse after the divorce. Under Title XLIII, Chapter 458 of the state’s Revised Statutes, New Hampshire courts consider each spouse’s gross income (all income from any sources, both earned and unearned) when awarding spousal support. 
  • Punish their spouse. Divorcing spouses often harbor deep mutual resentment by the time they are going through the divorce process. This may cause one spouse to do whatever they can to get the better of their soon-to-be-ex-spouse or punish them for their perceived misconduct during the marriage (e.g., infidelity). One way to do this is by hiding assets and finances to get the most out of their divorce. 

No matter the reason, concealing assets or finances before or during divorce is never the right move. 

Consequences of Hiding Assets in Divorce

A spouse who attempts to undermine the property division process by hiding assets can face a penalty for hiding assets in divorce, not to mention that there may be criminal charges for contempt of court, fraud, and perjury. Attempting to cheat a spouse out of their fair share of marital assets may cause the dishonest spouse to receive a smaller share of the marital assets and they may also be ordered to pay their spouse’s attorney fees and court costs. 

Another consequence of hiding assets in divorce is that the spouse would most likely lose all of their credibility throughout the divorce case. If a spouse lied about assets or finances, the judge may consider that spouse to be unreliable overall. If your spouse is accusing you of hiding assets or you think your spouse is trying to prevent you from receiving a fair share of the marital estate, you might want to speak with an attorney. The seasoned New Hampshire family law attorneys with Friedman & Bresaw, PLLC, have experiencing representing both sides of the dispute – individuals seeking to protect their assets and those trying to discover hidden assets. 

Strategies People Use To Hide Assets in Divorce

Spouses may use a variety of methods and tricks to gain a financial advantage in their divorce. While strategies may vary depending on the specific assets a spouse is trying to conceal, some of the most common ones are:

  • Hiding finances in the business. When a spouse owns a business, they have more opportunities to make sure that finances do not become part of the divorce. For example, a spouse may pay salary to non-existent employees while actually transferring those funds into a private account or postpone business deals or money transfers until after the divorce is final. These are just a couple of examples of how a spouse may attempt to hide finances with the help of their business. 
  • Setting up a trust or giving away money. A spouse may also set up a trust or give money to their friends or new romantic partner, only to accept its return after the divorce is over. Trusts may be especially effective, since they may not be in a spouse’s name, which makes it difficult to track them. 
  • Creating undisclosed accounts or purchasing investments. Another common strategy for concealing finances is to create a new account or purchase investments without disclosing it to the spouse or the court during the divorce. 
  • Undervaluing assets. Since it is not always easy to determine how much certain assets (e.g., jewelry, automobiles, collectibles, art, and others) are worth, a spouse may attempt to purposefully undervalue them on financial documents to prevent their unsuspecting spouse from getting a fair share of those assets. 

No matter how creative a spouse may think he or she is, in most cases an experienced attorney will be able to uncover the truth and locate hidden assets. While some assets and finances may be harder to track down, in most cases, it is only a matter of time before they are discovered. Once the deception has been revealed, the consequences and penalty for hiding assets in divorce can be severe. 

The Red Flags That a Spouse May Be Hiding Assets or Income

There are several signs that may indicate a spouse is trying to hide assets or income in divorce. Some of the red flags to watch out for include: 

  1. A spouse has bank accounts, credit cards, or investment accounts their spouse does not know about
  2. There is a sudden change in a spouse’s financial behavior during or shortly before the divorce (e.g., making expensive gifts, withdrawing large sums of money, or making unusual purchases)
  3. A spouse keeps financial documents or records out of reach for their spouse
  4. A spouse refuses to provide access to or share their financial information with their spouse
  5. A spouse is being secretive or defensive when asked about financial matters

This is a non-exhaustive list of signs indicating that a spouse may be trying to hide assets or finances in an attempt to manipulate the outcome of the divorce proceedings in their favor.

An Attorney May Be Able To Help You Protect Your Assets

If there are specific assets you want to protect in your divorce, trying to hide them is both ineffective and illegal. Instead, you might want to consider working with an experienced attorney to determine how you can legally protect the assets that you have worked so hard to accumulate without breaking the law and facing a penalty for hiding assets in divorce. In the Belknap County area, reach out to the attorneys at Friedman & Bresaw, PLLC to discover your options for protecting your assets. Call (603) 707-4800 to schedule a free case review today. 


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About the Attorney
Jesse Friedman

Jesse has personally represented thousands of clients throughout the State - from juvenile delinquency offenses through homicides. He has extensive trial and litigation experience and has obtained favorable outcomes for thousands of clients throughout the years.

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