Divorce is often a challenging and complex process, especially when it comes to the division of assets. In some cases, individuals may attempt to hide assets to secure a more favorable outcome for themselves.
They may do so through several avenues.
1. Undervaluing assets
One common method employed involves assigning a lower-than-accurate value to properties, investments or other assets. This makes it challenging for the other party and the court to determine the true worth during the asset division process.
2. Transferring assets
Another strategy to hide assets involves transferring ownership to third parties, such as friends or family members. By doing so, individuals aim to distance the assets from the divorce proceedings, obscuring them from the court’s scrutiny of the marital estate.
3. Creating shell companies
Some individuals resort to creating shell companies or fake businesses to hide the existence of assets. By funneling money or assets through these entities, they can create a complex financial trail that is difficult to trace accurately.
4. Stashing cash
A more straightforward method is stashing cash away. This can involve hiding physical money, depositing funds in undisclosed accounts, including offshore accounts, or using cash to make large purchases that can remain undetected during the divorce process. Cash transactions can be challenging to trace and account for accurately. Individuals may also overpay their taxes by large amounts so they can receive it back on their returns. Another common place to store cash is cryptocurrency, which is digital, unregulated and has a value in the trillions according to CoinMarketCap.
5. Inflating debt
Inflating debt is another tactic individuals may use to hide assets. By exaggerating debts or financial obligations, they make it appear that their financial situation is less favorable than it truly is.
Texas is one of the few states that divides marital property based on equality rather than equity. When spouses conceal assets, they cheat the law and their partners. It is important to report any suspicions to courts because they can launch investigations and assign professionals like forensic accountants to uncover hidden assets.
