What Happens If You Hide Assets During a Divorce?

Divorce is rarely an easy process, and dividing property can often become one of the most contentious aspects. At Jackman Law Firm, we understand how emotionally and financially taxing this period can be. Since our inception in 2014, we have guided families through difficult times with care and dedication. 

One challenge we often encounter is hidden assets. Unfortunately, some individuals use this tactic to gain an unfair advantage in the divorce settlement. Let’s take a closer look at hiding assets, why it happens, and the consequences.

What Is Considered an Asset in Washington?

In Washington, a community property state, nearly all assets acquired during a marriage are considered jointly owned—even if only one spouse’s name is on the title. When couples divorce, these assets are divided equitably.

So, what exactly qualifies as an asset? Here are some examples:

• Real estate: Homes, rental properties, and land.
• Bank accounts: Checking, savings, and joint accounts.
• Retirement funds: Pensions, 401(k)s, and IRAs, even if they won’t be accessed for years.
• Personal property: Cars, jewelry, art, and other valuables.
• Business interests: Ownership stakes, profits, and goodwill in a business.
• Future income: Bonuses, stock options, and other deferred compensation.

Community property typically includes any assets earned or purchased during the marriage. However, some items may be considered separate property, like inheritances or gifts received solely by one spouse. During the divorce process, the line between community and separate property can blur, especially if one spouse attempts to hide assets.

Why Do People Hide Assets?

While dishonest, hiding assets is more common than you might think. People may resort to this tactic for several reasons:

• Fear of losing property: They want to keep more than their fair share.
• Lowering support payments: By underreporting income or wealth, they may aim to reduce spousal or child support obligations.
• Maintaining control: Some people hide assets to retain power over financial decisions, even after divorce.

While the motivations vary, the underlying theme is an unwillingness to share fairly. However, hiding assets often leads to legal consequences, as courts take full financial disclosure very seriously.

How Can Assets Be Hidden?

Hiding assets can take many forms. Over the years, we’ve seen numerous tactics used to conceal wealth. Here are some common methods:

Storing Funds in Hidden Locations

Creating offshore accounts or setting up shell companies are common ways to keep money out of sight. These accounts are often held under a different name, making them harder to trace.

Underreporting Income

Some individuals inflate business expenses, hide cash earnings, or undervalue their assets during financial disclosures. This tactic is particularly common among self-employed individuals or business owners.

Transferring Assets to Friends or Family

It’s not uncommon for someone to temporarily transfer property, businesses, or valuable items to trusted individuals to keep them off the table during divorce proceedings.

Investing in Cryptocurrencies

Cryptocurrencies provide a relatively anonymous way to move funds. Because of the decentralized nature of digital currencies, tracing these transactions can be challenging without proper expertise.

Overpaying Debts

Some individuals attempt to lower their net worth by paying off loans, mortgages, or credit card balances in advance, knowing they can retrieve the funds later.

Creating Separate Bank Accounts

Opening undisclosed accounts and funneling money into them is another tactic often used to hide funds.

Delaying Raises or Bonuses

Some may intentionally postpone income increases, such as raises or bonuses, until the divorce is finalized, ensuring these funds are excluded from the settlement.

Hidden assets often involve complex financial maneuvers, including the use of trusts or intricate legal instruments. However, these methods rarely go undetected forever.

What Are the Consequences of Hiding Assets in Washington?

The legal repercussions of hiding assets in a divorce are severe. Washington courts demand full financial transparency. Failing to disclose assets can lead to significant penalties, such as:

Contempt of Court

Hiding assets violates the legal obligation to provide full and honest disclosure. Courts can hold individuals in contempt, which may include fines or other penalties.

Monetary Penalties

If hidden assets are uncovered, the court can impose fines or require the offending party to cover the other spouse’s legal fees. These penalties aim to discourage dishonesty.

Criminal Charges

Concealing assets may lead to fraud charges in extreme cases, particularly when large sums or intentional deception are involved.

Damaged Reputation in Court

Hiding assets can harm the offender’s credibility. Judges may take this into account when deciding other aspects of the divorce, such as child custody or visitation rights.

Reopening of the Divorce Case

Even if hidden assets are discovered after the divorce is finalized, the court can reopen the case to redistribute property fairly. This means the offending party’s efforts to conceal assets may ultimately backfire.

Additionally, failing to disclose assets can affect spousal and child support calculations, potentially resulting in a less favorable overall outcome for the dishonest party.

How Are Hidden Assets Discovered?

Uncovering hidden assets requires diligence and expertise. Here are some ways we help our clients identify concealed wealth:

Utilizing the Discovery Process

During divorce proceedings, we can use legal tools such as interrogatories, depositions, and requests for production to uncover undisclosed assets. This process compels both parties to provide detailed financial information.

Hiring Financial Experts

Certified public accountants (CPAs), forensic accountants, or private investigators can trace financial transactions, revealing hidden assets or discrepancies in financial records.

Subpoenaing Records

We can obtain financial records from banks, investment firms, or other institutions to track asset ownership and transfers.

Applying for Court Orders

If we suspect hidden assets, we can request court orders to freeze accounts or demand disclosure. This prevents further concealment and ensures fairness.

Lifestyle Analysis

Examining spending patterns can often expose hidden assets. For instance, someone claiming financial hardship but living lavishly may be concealing funds.

We’ve helped many clients recover hidden assets, ensuring they receive what they’re entitled to in their divorce settlement.

Facing Divorce in Washington? Suspect Hidden Assets? Contact Jackman Law Firm.

At Jackman Law Firm, we understand the emotional and financial strain of divorce. If you suspect your spouse is hiding assets, our team is here to help. With years of experience handling family law cases, we know how to uncover concealed wealth and protect your rights.

Don’t face this challenge alone. Call us today at (206) 588-5555 or visit our Contact page to schedule a confidential consultation. Let us help you navigate this difficult time and work toward a fair resolution for you and your family.