Finances affect nearly every aspect of a divorce case, including property and debt division, child support, and spousal maintenance. To properly address these issues and end their marriage, divorcing spouses must provide a full accounting of their wages, property, debts, and expenses. Financial transparency during divorce is not only ethical, but it is also required by law. Spouses who hide money or property, lie about their earnings, or fabricate financial data can face serious penalties and may even be held in contempt of court.
How Do Spouses Misrepresent Finances in a Divorce?
Divorcing spouses who want to gain an advantage in a divorce case may lie about their financial circumstances. For example, a parent who is required to pay child support may report income from one job, but not the “under the table” cash earnings he or she gets from a second job.
Spouses may hide money or property by temporarily transferring the property to friends or family, relocating funds to offshore accounts, or even purposefully overpaying the IRS. Business owners, entrepreneurs, and individuals with complex financial portfolios often have abundant opportunities to misrepresent their financial situation. They simply adjust the numbers to make their financial situation look bleaker than it actually is. They often do this in hopes of getting a greater share of the marital estate during property division.
...