What Happens if My Spouse Hides Assets During Divorce in SC?

Dividing marital assets fairly and equitably is an essential element of divorce. In South Carolina, both spouses have a legal obligation to fully disclose their earnings, properties, and liabilities. If a spouse hides assets during divorce is not just unhelpful; it can result in an inequitable and unfair division of property. Someone found to be hiding assets during divorce could be penalized with fines, sanctions, modifications to support obligations, or, in severe cases, criminal charges.

Legal Requirements for Asset Disclosure in a South Carolina Divorce

To ensure a fair and equitable division of assets in a South Carolina divorce, both spouses must fully disclose all of their separate and marital assets.

• Marital assets generally include everything acquired during the marriage, such as bank accounts, real estate, and investments, regardless of whose name is on it.
• Separate assets are owned individually by one spouse. While they generally are not subject to property division in a divorce, they should be disclosed. Examples of separate assets include property owned before the marriage, an individual inheritance, gifts given specifically to one spouse, and a portion of personal injury settlements.

What Are Common Methods of Hiding Assets in a South Carolina Divorce?

Unfortunately, some spouses may try to obtain a more favorable outcome by hiding assets during a South Carolina divorce. There are various ways someone may try to hide assets during a divorce.

• Transferring ownership of valuable property, like real estate or vehicles, to a friend or relative.
• Underreporting income by exaggerating expenses, reducing gross revenues, or omitting income sources, like bonuses and under the cover payments received via cash apps.
• Undervaluing assets by providing an inaccurate appraisal of property or under-declaring the value of collectibles, shares, or other assets.
• Suppressing income by deferring a bonus or commission, requesting reduced hours, or having an employer temporarily lower a salary.
• Manipulating business income to declare lower income or higher business expenses to show reduced business productivity.

How Courts Discover Hidden Assets

When hidden assets are discovered, it is often only after a thorough investigation. If one spouse believes the other is hiding assets, their attorney can subpoena bank accounts, tax returns, and other financial records, have them reviewed by a forensic accountant to identify any discrepancies, and bring the issue to the court’s attention.

Legal Consequences of Hiding Assets in a South Carolina Divorce

A spouse who is found to have hidden assets during a divorce in South Carolina could face severe penalties. The court could require that the concealing spouse pay the value of the concealed assets to the other spouse. This could result in a division of property that heavily favors the spouse who fully disclosed their assets. If the hidden assets are discovered after the divorce has been finalized, the court could reopen the case and modify support obligations.

The court could also find the concealing spouse in contempt of court and impose fines, additional legal costs, or even jail time.

In severe cases, hiding assets in a divorce could be considered a crime. The court could treat deliberate concealment of assets as a form of fraud, which could lead to criminal charges. The court could find that the concealing spouse committed perjury, the crime of making a false statement under oath, and punish the concealing spouse with fines or jail time. The court could also find that the concealing spouse obstructed justice, which could carry criminal penalties.

Protect Yourself in a South Carolina Divorce

It is not uncommon to lose trust in your spouse before and during a divorce. But how can you be sure your spouse is not hiding assets? Start by paying attention to your spouse’s financial behavior. If they suddenly claim to be borrowing money from a family member or friend, especially when this was not the case before, it could be worth investigating the source of the money. Your spouse could be trying to hide assets that should be part of the marital estate.

Another sign your spouse could be hiding assets is a noticeable drop in mail arriving at your home, especially bank statements, retirement account summaries, and loan paperwork. A sudden switch to receiving account statements via email could be a way for your spouse to control access to financial information.

To avoid being accused of hiding assets, be transparent with your spouse and share all relevant financial information, including bank statements, statements from retirement accounts, previous tax returns, records of any debt you have incurred, updated balances, and more. If you own a business, you should follow general accounting principles in all business-related accounting. Being transparent and providing information can help assure your spouse that you are not hiding anything.