What Are the Risks and Consequences of Concealing Assets During an Indiana Divorce?

Hiding assets during a divorce is a serious issue that can have significant legal and financial repercussions for the offending spouse. In Indiana, as in other states, both parties are required to fully disclose all their assets and liabilities as part of the divorce. When one spouse attempts to conceal assets, it not only violates the law but also compromises the fairness of the property division process. If you believe your spouse may not be reporting the entirety of their assets, a skilled Indianapolis divorce attorney can investigate your case and help bring any undocumented assets to light.

What Legal Obligations and Disclosure Requirements Must Divorcing Spouses Abide By?

Indiana Code § 31-15-7-4 mandates that both spouses provide a complete and honest disclosure of all their assets and debts during divorce proceedings. This requirement is crucial for ensuring an equitable distribution of marital property. When a spouse files a Petition for Dissolution of Marriage, they may be required to complete a verified disclosure agreement outlining their assets and debts. Additionally, a Temporary Restraining Order on Assets (TRO) may be filed, which prohibits both parties from hiding, destroying, or disposing of assets that could affect the property division.

How May Assets Be Hidden?

Unfortunately, some spouses may attempt to withhold funds and property from their ex, particularly if the divorce is contentious or they have substantial financial holdings. Spouses trying to conceal assets may employ various tactics to keep their wealth out of the divorce settlement. Some common methods include:

  • Using business accounts to hide personal assets
  • Delaying lucrative business deals until after the divorce
  • Paying salaries to non-existent employees
  • Setting up trusts or “gifting” money to friends or family members
  • Using marital assets to pay for the expenses of a new partner

These strategies are designed to make it appear as though the spouse has fewer assets than they actually do, potentially leading to an unfair division of property.

Why is the Discovery Phase of the Divorce Process Critical to Property Division?

During the divorce process, both parties have the opportunity to uncover undisclosed assets through the discovery phase. Collecting relevant information about finances is crucial to ensuring fair property division. The discovery process may involve:

  • Requesting financial documents from the other spouse
  • Submitting interrogatories (written questions) that must be answered under oath
  • Conducting depositions where spouses answer questions under oath
  • Subpoenaing financial records from banks, employers, or other relevant institutions

In cases where complex financial situations exist or there’s a strong suspicion of hidden assets, hiring a forensic accountant may be crucial in determining whether the other spouse has money or property that they are not reporting to the court. These professionals are skilled at tracking down undisclosed assets and uncovering financial discrepancies.

What Are the Legal Consequences of Hiding Assets?

When a spouse is caught concealing assets during an Indiana divorce, they may face severe legal repercussions. The courts take such actions very seriously, and the penalties can be significant:

Contempt of Court

Full disclosure of assets is a legal requirement, and failing to abide by this law can have serious ramifications. A spouse who hides assets may be held in contempt of court for violating the disclosure requirements or disobeying a TRO. Consequences for being found in contempt of court may include fines or, in extreme cases, even imprisonment.

Financial Penalties

The court may impose financial sanctions on the offending spouse for their actions. They may be required to pay the other spouse’s attorney fees and court costs incurred due to the misconduct. Additionally, the judge may order punitive fines as a deterrent against such behavior in the future.

Adjustment of Asset Division

If hidden assets are discovered, the court has the discretion to adjust the division of marital property to ensure that the distribution of assets remains fair and equitable. The innocent spouse could receive a larger share of the assets as compensation for the other’s dishonesty. In some cases, the court may even award the entire hidden asset to the other spouse.

Perjury Charges

Lying under oath or on official documents about assets can lead to perjury charges, which are a criminal offense. A conviction for perjury can result in fines, community service, or even imprisonment.

What Measures Can a Spouse Take to Help Ensure All Assets Are Disclosed During a Divorce?

For spouses who suspect their partner may be hiding assets, there are several steps they can take to protect their interests:

  • File a temporary restraining order on assets at the beginning of the divorce process to prevent asset dissipation
  • Insist on formal discovery procedures rather than informal exchanges of information
  • Work closely with an experienced divorce attorney who can guide them through the discovery process and help identify potential red flags
  • Consider seeking the help of financial experts, especially in cases involving complex financial situations or business ownership
  • Be vigilant and document any suspicious financial activities or sudden changes in spending habits

By taking these precautions, individuals can increase their chances of uncovering hidden assets and ensuring a fair division of marital property.

How Can a Dedicated Divorce Attorney Assist With Asset Disclosure Issues?

Hiding assets during an Indiana divorce is a serious offense with potentially severe consequences. It violates the law and undermines the principles of fairness and equity that the divorce process aims to uphold. The courts have various tools at their disposal to penalize such behavior, from financial sanctions to criminal charges.

For those going through a divorce, it’s crucial to be honest and transparent about all assets and to work with experienced legal professionals who can help navigate the complexities of property division. Ultimately, the risks of hiding assets far outweigh any potential short-term gains, making full disclosure the wisest course of action for all parties involved in a divorce proceeding.

If you have questions or concerns about asset disclosure in your divorce, The Law Office of Deidra Haynes can provide helpful advice and representation. To discuss your case, contact our Indianapolis office today at 317-785-1832 to schedule a no-obligation consultation.