Many couples in North Carolina have spent years developing substantial marital estates. During your marriage, you could find yourself buying a home, funding a retirement account and otherwise accruing valuable assets. Eventually, though, your marriage starts showing signs of serious problems. You know you’re likely going to be headed toward divorce court in the near future.
It is completely normal to want to protect your financial assets during a divorce. However, you need to know the difference between creating a proactive strategy for your divorce and potentially violating state law when it comes to dividing your assets. Intentionally hiding assets from your spouse and the courts could result in a far less favorable outcome to the asset division process.
North Carolina courts seek equitable distribution arrangements
Unless you and your spouse have a valid prenuptial agreement on record, you either have to agree on terms for your divorce or let the courts make those decisions for you. They will do their best to ensure that they divide your assets in a manner that is equitable, fair and just. If you’re headed to court for a judge to decide, you will have to provide an inventory of all of your marital assets and debts. These include any valuable items you’ve accumulated during marriage, as well as all debts.
Simply leaving significant assets, such as a hidden bank account, off of this inventory could influence the outcome of the court’s decision in your favor. Obviously, you’ll receive more than half of your marital assets if you substantially underreport what assets you have to split. If your spouse, his or her attorney, or they courts discover that you intentionally withheld financial information in your divorce, you could face steep penalties when the courts do finalize your divorce.
Avoid all of the common forms of hiding assets
There are many ways for spouses to hide assets, but the courts, divorce lawyers and forensic accountants know about most of them. It is common, for example, for one spouse to divert household income, which is rightly marital assets, into a separate account that the other spouse knows nothing about. Other people may make routine cash withdrawals from shared accounts, creating a secret stockpile of liquid capital.
Another common way to hide assets is in purchases that you know won’t interest your spouse. If you have a hobby, like collecting fine art or rebuilding class cars, the items you purchase to support that pastime could very well represent substantial amounts of marital assets. Even if you know your spouse has no interest in the actual objects, if you bought them with marital assets (income during your marriage), you should plan to report it during your divorce.
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