One of the most common questions divorce attorneys hear is, "Can I hide some of my money so my spouse doesn't get it?"
The answer is simple: don't do it.
As family law attorneys, our goal is to present our clients to the court with complete credibility. When a judge is deciding on issues involving your finances, your children, and your future, honesty is one of your greatest assets. We want our clients to have "clean hands" and to demonstrate that they have complied fully with the law and the court's orders.
The reason I always advise my clients to be completely forthcoming about their income, assets, and debts is straightforward: attempts to conceal assets are frequently discovered, and the consequences can be severe.
In dissolution of marriage proceedings in the State of Florida, both parties are generally required to exchange Mandatory Disclosure. These court-required financial documents include bank records, tax returns, pay stubs, financial affidavits, retirement account statements, and other records that provide a complete picture of each party's financial circumstances.
The court relies upon these disclosures when determining issues such as:
- Child support;
- Alimony, if applicable; and
- Equitable distribution of the marital estate.
These disclosures are not optional in contested cases. They are required by the Florida Family Law Rules of Procedure.
So, what happens if you choose to hide assets?
A party who intentionally conceals income or assets risks far more than simply having those assets discovered.
Depending on the circumstances, the court may impose sanctions, which can likely include the following:
- Ordering additional financial disclosures;
- Awarding attorney's fees and costs to the other party;
- Drawing adverse inferences against the offending party;
- Awarding a larger share of certain assets to the other spouse; or
- Other remedies the court deems appropriate.
In particularly egregious cases, attempts to hide assets can significantly damage a party's credibility before the judge. Credibility matters. Once a court questions a person's honesty in one aspect of the case, that very same skepticism can affect many other issues as well.
"But How Would Anyone Find Out?" Because experienced family law attorneys know where to look.
When appropriate, we review financial records carefully and compare bank statements, tax returns, payroll records, business documents, retirement accounts, credit card statements, and other financial information. If the circumstances warrant it, we may work with certified forensic accountants who specialize in tracing income, identifying undisclosed assets, and analyzing suspicious financial transactions.
Large cash withdrawals, unexplained transfers between accounts, unusual spending patterns, hidden business income, and the dissipation of marital assets often leave financial footprints. Those footprints can frequently be traced.
Likewise, you should assume that opposing counsel will conduct the same level of scrutiny when reviewing your financial records.
Simply put, honesty is the better strategy. Trying to outsmart the financial disclosure process is rarely worth the risk. The short-term benefit of concealing an asset is often outweighed by the long-term legal and financial consequences if the concealment is discovered.
The better approach is to provide complete and accurate disclosures from the outset. Doing so preserves your credibility, reduces unnecessary litigation, and allows your attorney to focus on obtaining the best possible outcome based on the facts and the law, not on defending avoidable misconduct.
At Chesser & Barr, P.A., we work diligently to ensure that our clients comply with their legal obligations while also holding the opposing party accountable for doing the same. Whether we are reviewing mandatory disclosures or working with financial experts to trace assets, our objective is to ensure that the court has an accurate picture of the parties' financial circumstances so that a fair result can be reached.
This article is for general information only and is not intended as and does not constitute legal advice or solicitation of a prospective client. It should not be relied on for legal advice in any particular factual circumstance.
About the Author: Joseph “JP” Paul is an attorney with the Crestview office of Chesser & Barr. A former Sheriff’s Deputy and military police officer, he continued his calling of service to his community by becoming a lawyer and working both as an Assistant State Attorney and an Assistant Public Defender prior to entering private practice. His experiences in these roles aid him in continuing to provide excellent legal services to the clients he serves.