Divorce proceedings are complex at the best of times, but if one spouse has hidden assets, the process can become even more involved. Finding hidden assets requires looking into all aspects of your spouse’s finances with the help of the experienced Kansas City divorce attorneys at Joseph, Hollander & Craft.
What Is a Marital Asset?
One of the most important aspects of divorce is the division of assets. How this is accomplished depends on state laws and how they define marital assets. Missouri and Kansas are both equitable distribution states, which means all marital assets are subject to division.
Equitable distribution or division refers to the process of dividing assets by considering numerous factors, including the length of the marriage, the financial contributions each spouse made throughout the relationship, and the tax consequences of the proposed distribution.
For equitable division, it is necessary to establish assets as either marital or nonmarital. Marital assets are those that have been acquired by either spouse throughout the marriage. It’s not relevant whose name is on a deed or which spouse actually made the purchase. The only exceptions would be assets that fall into these categories:
- Acquired by inheritance or gift
- Excluded by prenuptial or post-nuptial agreements
- Acquired after a legal separation
- Acquired in exchange for assets owned before the marriage
Non-marital assets can be converted into marital ones during the marriage. Joint titling would accomplish this.
Note that “equitable” does not mean “equal,” so one spouse may end up with more than 50% of the assets based on a variety of factors.
Red Flags Your Spouse Is Hiding Assets
When considering how to find hidden assets during divorce proceedings, divorce attorneys generally recommend watching for certain red flags, including:
- Opening new bank accounts
- Transferring assets to family members
- Sudden financial secrecy
- Intentionally overpaying creditors or the IRS
- Unexplained increases in business expenses
Any financial actions that are out of character or for which there is no reasonable explanation may be cause for concern.
Why Cryptocurrency and Digital Assets Are Hard to Find and Value
Cryptocurrency can complicate divorce proceedings. It can be very difficult to obtain a clear picture of how much your spouse may have in cryptocurrency or other digital assets like NFTs. For one thing, many cryptocurrencies are designed to help protect anonymity, making it a challenge to establish ownership.
Handling cryptocurrency in divorces requires careful assessment of the currency’s value because of its volatility. This constant fluctuation could require the court to choose its value on a specific day.
But exactly what happens to digital assets in divorce? When dividing cryptocurrency in divorce proceedings, the same rules that govern property division apply to digital assets. If the assets in cryptocurrency are marital assets, they have to be equitably divided.
Hiding Assets in a Business
Some spouses could try to use their business as a hiding place. A spouse may attempt to hide assets by paying non-existent employees or by involving a business partner who will keep the money or property until after the divorce is final.
It’s also possible that a spouse may try to delay significant business dealings and contract payments or that they could undervalue business assets.
Underreporting Assets to Reduce Child Support
One common tactic that spouses use to reduce their child support liability is to underreport their assets. Despite this action being in violation of the law, it still occurs. Spouses may underreport income on their tax returns or could disguise income as business expenses.
How Your Kansas City Divorce Lawyer Identifies Assets and Debts
As divorce proceedings begin, we start gathering information on any marital assets. This is done through discovery, which could involve subpoenas to get as much data on the marital finances as possible. We can request information directly from banks and other institutions and may also have your spouse testify under oath about specific assets.
If there are suspicions that your spouse is hiding assets, we may rely on the services of a forensic accountant. These professionals examine financial records, perform audits, and look for financial statement fraud. They can spot illegal tactics like fraudulently transferred assets.
Joseph, Hollander & Craft has decades of experience helping clients throughout the Kansas City Metro. Our divorce attorneys understand the challenges facing clients with substantial assets, and we have a trusted network of financial professionals who can assist us on your behalf.
What Happens if the Courts Catch You Trying to Hide Assets?
If a spouse involved in a divorce case is caught trying to hide assets, the consequences can be steep. Missouri views this behavior as a criminal act if the assets were hidden during formal interrogatories. As a result, it can lead to fines, jail time, or both. The court can also grant more property to the other spouse, including all hidden assets.
In Kansas, hiding assets during divorce proceedings could mean criminal charges, too. It can be seen as perjury, fraud, or contempt of court, depending on the exact actions involved. There can be significant fines involved, including needing to pay the other spouse’s legal bills, as well as the risk of jail time.
When Hidden Assets Are Found After a Divorce Is Finalized
Hidden assets found after divorce can necessitate re-opening the divorce case to have it newly evaluated by the court. Your lawyer can file a motion to have the divorce judgment set aside because fraud was involved in the process. Even if the omission was made unknowingly, there may be grounds to set aside the previous ruling.
Once the court offers a new judgment, you may be able to file civil charges against your ex-spouse. The state may choose to pursue criminal charges.
In other cases, reaching a settlement may be a better option than going to court for hidden assets. If there is significant evidence that you can use against your ex-spouse, they may be more likely to settle.
How Our Kansas City Divorce Attorneys Protect Your Financial Future
Divorce proceedings in which there may be hidden assets, especially in the form of cryptocurrencies, are some of the most complicated to handle. At Joseph Hollander & Craft LLC, our skilled team of divorce lawyers in Kansas City can thoroughly investigate your case.
We work closely with forensic accountants who can spot any existing irregularities in your spouse’s business or personal assets. Using all of the evidence this professional uncovers, our team can then file motions with the court that address the discrepancies and potential fraud.
With relentless dedication and extensive resources at our disposal, our lawyers at Joseph Hollander & Craft LLC can take on the challenges that these complicated proceedings pose.
Contact Our Kansas City Divorce Attorneys Today
The team at Joseph Hollander & Craft LLC can provide robust representation for all of your asset division and cryptocurrency divorce needs. Contact us to schedule a consultation with one of our Kansas City divorce lawyers. We maintain additional offices in Overland Park, Lawrence, Topeka, and Wichita, KS, for your convenience.