Adultery and Hiding Assets in Divorce

Every once in a while, when we can carve out a moment to turn on the television, we opt to watch 90 Day Fiance instead of the newsreel. You know, those days when we just need to feel a different type of numb. Well, that’s sort of the spirit of this post. It’s a little clickbaity, and it’s meant to be. What’s the fun of getting these posts from a divorce lawyer unless you get some of the juicy stuff too? 

So, let’s just dive in with some of our favorite Q&A’s when it comes to adultery and hiding assets, the 90-Day-Fiance-equivalent of modern divorce.

Q: I suspect my partner is cheating. How can I hide assets from the divorce process?

A: You can try, but you’ll probably fail. And, it will also likely cost you more than the asset is worth to even give it a shot. But there are some nuances. 

Technically, before filing for divorce, you can sell, transfer, loan, encumber or gift away as much of your property as you want (provided you are the titleholder of the property). For example, if you had a joint savings account with your spouse and wanted to make sure that those funds are preserved, it is not illegal to withdraw those funds and put them in an account in your name alone or someone else’s name. Just because it’s not illegal however, does not mean that it’s a great idea or that the assets won’t get divided in the divorce, it just means that they won’t get squandered by your spouse in the meantime.

By contrast, once you commence a divorce action, the courts impose an automatic “freeze” on your assets, preventing both you and your spouse from transferring assets out of your names. You’ll also have to disclose no less than three years, and sometimes many more, of financial statements and other documents involving transactions that occurred during the marriage. If it is found that transfers were made in bad faith at any time, those transfers will likely be “clawed back” into the marital estate and credited to the other spouse in determining how to equitably distribute the property. The process is exhaustive, and expensive. 

The bottom line is that attempting to hide assets in order to avoid having to divide them in a divorce is a losing proposition. If you’ve discovered that your spouse is cheating and that you are not going to reconcile, there is a way to protect your assets during the pendency of the divorce ligation that won’t have you backpedaling and looking foolish. This is where things get really technical, so you'll have to call us to learn more about the nuances and how to avoid looking the fool.

Q: My partner is cheating, can I use that to get more of our assets in the divorce?

A: Irrelevant, unless...your partner’s shenanigans have involved the dissipation of a marital asset. For example, if your partner liquidated an investment portfolio savings to finance lavish gifts for and all-expense-paid trips with the “partner in crime”, then evidence of those poor choices would be relevant to show that you are entitled to an offsetting share of the remainder of the marital estate. 

The only other time your partner’s misdeeds are relevant is when they would impact the needs and best interests of your child(ren). Otherwise, frankly, the courts DO NOT consider the sordid details of your spouse’s affair when determining how to distribute the marital estate. 

Q: How can I find out if my partner is hiding money from me?

A: Well, if you’re serious, the best advice is that you should probably take a step back and ask yourself a much more poignant question, which is whether you have a “partner” in the meaning that you intended when you got married. My guess is that if you are truly concerned with continuing the marriage, you’ll ultimately need to work out some serious trust, communication and transparency issues. 

But, setting that aside and getting to the question, unless you commence a divorce action which would trigger a legal process for discovering financial assets, you’ll probably have to hire a private investigator experienced in uncovering hidden assets. Again, before doing that, ask yourself what you will do with the knowledge once you have it. If there are no hidden assets found, will you be satisfied and be able to live comfortably, trusting your spouse? Will you consider that you may be engaging in toxic behavior? If you do discover that your spouse is hiding assets, are you ready to file for divorce? 

What will you do with the knowledge? That’s a question you should have the answer to before proceeding in any direction. An honest and mature analysis should lead you to realize that the endeavor, itself, is flawed and a misfire in terms of how to manage your life and relationships in a healthy way.

Q: Can I have a provision in my prenuptial agreement that would punish my partner if they commit adultery? 

A: Yes, yes you can. Couples can negotiate terms for unequally distributing assets and/or waiving rights to spousal support (aka, alimony) in the event that one of them commits adultery. 

While this sounds like an interesting proposition, there is a catch. The catch is that, in order to enforce such terms in a prenup, the accusing party will carry the burden of proof to show that the other spouse has committed adultery. This may not be so difficult in our information and technology age, but it’s definitely not as easy as you might think. Meeting the burden of proof for adultery often involves hiring a private investigator and calling corroborating witnesses to testify at trial. To put it mildly, it can get messy, expensive and can make a very private issue quite public. 

It really is no joke if you are dealing with any of these issues. Unpacking these situations is complex and can be nearly impossible without the guidance of a careful and compassionate attorney. If you’d like to discuss your situation, email us to schedule a consultation with a member of our team: consultation@artesezandri.com.