The emotional impact of divorce may leave separating partners feeling anxious, fearful and resentful. That is especially true when it comes to the prospect of a court-ordered division of property: whether bank accounts, personal belongings or real estate.
These intense emotions may lead either spouse to consider hiding, selling or spending assets before divorce finalization. However, doing so may ultimately have a costly impact on the court’s final decision, and, in some cases, may even result in jail time or other legal penalties.
New Jersey courts require full asset disclosure
In New Jersey, both divorcing partners must fully disclose all household assets, income sources, debts and other financial information by submitting a Case Information Statement. Items that each spouse must submit include both shared, marital property and any separate property that a spouse owns individually.
Hiding assets may take many forms
There are many ways that divorcing partners may attempt to hide or spend assets before the court determines an equitable division of property. In some cases, an individual may not even realize that their actions may have legal consequences. Common examples include:
- Transferring money or property to a third party
- Making large cash purchases
- Putting off a promotion, bonus or other increase in income
- Claiming an asset does not exist
- Purposefully overpaying taxes
- Exaggerating expenses for housing, childcare, travel and other
- Attempting to retain assets in a business
The penalties for hiding assets may be severe
The New Jersey Case Information Statement form includes a signed oath affirming that all financial disclosures are accurate and complete. Providing false information on the form may constitute perjury or fraud: criminal charges that may result in imprisonment and contempt of court.
Dissipating or failing to disclose assets may also negatively influence the court’s other decisions. In addition to awarding all hidden assets to the other partner, attempting to hide property may impact a judge’s decisions about child support payments, alimony and even custody decisions.