On occasion, some married spouses lie about finances during their marriage. While it's not illegal to keep a purchase secrete from a spouse or withhold the details about one's earnings from a husband or wife – that changes when you get a divorce.
In fact, when couples get a divorce each spouse must be open and honest about their finances, including their income, assets and debts – it's a legal requirement.
There's something about divorce that makes some people want to lie or cheat to keep at least a portion of their assets all to themselves, without giving their spouse what they are legally entitled to.
Many divorcing parties are surprised to learn how common it is for spouses to try and hide assets from their soon-to-be exes. These methods range from getting cash back from the grocery store (making it look like the money was spent on groceries) to reporting less income to lower child support or alimony payments.
Some of these dirty tricks, include:
- Reporting higher expenses
- Working under the table
- Not reporting cash income
- Overstating liabilities and debts
- Undervaluing marital property
When a spouse is considering hiding assets in hopes of keeping more of the marital property to themselves, they should think again. Not only is such a strategy misguided and underhanded, but it's illegal and can cause serious negative consequences.
As an uncontested divorce firm, our clients are generally willing to reach a fair and reasonable settlement, but we have seen estranged husbands and wives test the waters to see what they can get away with, and we're not alone.
According to the National Endowment for Financial Education, about one-third of adults in the U.S. who combine their assets with a spouse or partner say that they have been deceptive about finances.
Such deceptive actions included hiding cash from their spouse (58%), hiding a statement or a bill from their spouse (30%), and lying about finances or debt (34%), according to an NEFE press release. While these behaviors aren't illegal during marriage, they can mean big trouble during divorce.
Hire a Qualified Divorce Team
When you and your spouse sign the financial affidavit – which is required in every divorce case – you are both swearing under penalty of perjury that you're telling the truth about your income, debts, assets and expenses.
If either of you lie under oath, there can be serious financial and legal consequences, which may include paying the other spouse's attorney fees, paying fines, and in serious cases, incarceration to name a few.
If you're divorcing, it's critical that you hire a qualified divorce team, such as Cairns Law Offices to not only handle your case, but explain how you should handle your bank accounts, cash, investments, and other assets and liabilities.