Tag Archive for: dividing marital assets

Hiding Marital Assets: Do the Numbers Add Up?

Divorce in New Jersey and Pennsylvania involves the equitable division of marital assets. If one spouse wants to keep more than their fair share, they may resort to hiding assets. This not only goes against family law and court procedures but, depending on the circumstances, could lead to criminal charges. So, how do you know if your spouse is hiding assets from you?  

We see the best and worst in divorces. Some couples understand they are no longer a good match. They amicably and respectfully work with each other and go their separate ways. On the other end of the spectrum are those who see divorce as a battlefield where rules don’t apply to them, and they will do all they can to come out ahead. These are the people who hide assets. 

What is Marital Property? 

Marital property includes the property either spouse acquires during the marriage or with funds earned during the marriage. It also consists of the increased value of non-marital or personal property up to separation. It is not always clear when an asset is marital because couples may mix personal and marital assets during the marriage. 

What is the Equitable Distribution of Marital Property? 

Part of ending a marriage is equitably, or fairly, dividing marital property and debts. This does not mean assets will be evenly split. Usually, part of negotiating this issue will involve alimony payments. One spouse may be willing to get fewer assets in exchange for higher alimony or vice versa. Pennsylvania statute spells out several factors to be considered when dividing marital property.  

Why Would a Spouse Hide Marital Property? 

The spouse may try to keep as many assets as possible by misclassifying marital property as personal or hiding assets, so the other spouse does not know about them.  

How Could a Spouse Hide Marital Property? 

Their efforts are only limited by the spouse’s imagination. It is easier to do if the spouse owns a business, the couple has a lot of assets, or the spouse manages the family’s financial matters. Some common ways to shield assets include: 

  • A spouse may try to move cash from personal to business accounts if they own a business. The spouse may try to delay large contracts until the divorce is complete. The company may create “ghost” employees who do not exist or bogus expenses or asset purchases. What would appear to be a business expense is transferring money into bank accounts controlled by the spouse. A business could also make a fake loan to an entity that is just a front for the spouse. 
  • Money and other assets could be transferred to family or friends.
  • A spouse may set up investment accounts and buy stocks or other investments in their name only and not tell their spouse. 
  • Physical assets like cars, artwork, or jewelry may be undervalued. If the other spouse accepts these estimates as accurate during the negotiation and the person keeps them, they are getting more value than they deserve. 

If your spouse has lied to you about other aspects of their life, the fact they are hiding property should not be a surprise. 

How Can We Find Hidden Marital Property? 

If you have worked on as many divorce cases as we have, you develop an awareness of how a less-than-honest spouse may operate. Hiring a forensic accountant can be a good investment if your finances are complex or a business is involved. 

Our most important information source is you. You can tell us about your family’s income, assets, and family-owned business. You can supply us with copies of documents establishing your family’s assets and your tax returns. 

During conversations with your spouse or while negotiating a divorce settlement, you need to tell us if what we are told does not make sense. There is no point in dealing with a spouse acting in bad faith. 

After the divorce complaint is filed, we can request information and documents from your spouse and their business. We can ask them questions during a deposition. Information and documents we obtain could be sent to an accountant for analysis. 

Are There Penalties for Hiding Assets? 

If a spouse is violating court rules and orders, a judge could take action in response. They may order the offending spouse to pay a larger share of their assets than if they acted honestly and order that they pay for our investigation and attorney time spent uncovering hidden assets. 

The police could get involved if your spouse went so far as to commit crimes like forgery. If a spouse secretly makes money “off the books” without paying taxes, state and federal taxing agencies might be interested. 

If you have any questions about equitable division or believe your spouse is hiding assets, please contact us here at Karen Ann Ulmer, P.C. We can discuss this and how we can help you through the divorce process.  

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Issues When Dividing Vacation Properties in Divorce

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In Pennsylvania, if a divorcing couple cannot come to an agreement outside of court, all marital assets will be divided according to equitable distribution, which means, effectively, whatever the court thinks is appropriate after considering a number of factors. As long as both parties are reasonable, we encourage divorcing couples to avoid court so they can retain control of the division of their marital assets.

This is true for all assets, including vacation property. Even if the property was given to one spouse exclusively or purchased exclusively with one spouse’s income, and no family money was ever used to pay for its mortgage or upkeep, such property may be considered marital and will factor into the division of assets. Whether your divorce goes to court or not, you will probably have to decide what is to become of your vacation property.

Appraise the asset

Before you decide what to do with the property, you need to get an accurate appraisal of its market value. Also important is a complete listing of all costs associated with owning and maintaining the property: mortgage, interest, taxes, utilities, repairs, landscaping, and more.

With this clear, factual foundation, you can begin to evaluate the course of action that will best benefit the two of you and any children you have.

Decide your best option

Selling the property might be the easiest choice, allowing you to divide the funds received between you. It can be emotionally difficult to let go of a place where you may have created fond memories, but consider your need for liquid assets and the simplification of the process, which are important advantages to this option.

If you and your spouse are on reasonably good terms, you could choose to keep the property and divide its use. This is advantageous if children are involved, since they would still have the familiar vacation home to go to, providing them with much-needed security and continuity. But be sure to create a written document, signed by both of you, that will clearly delineate the times and seasons each will be using the home, the expenses each of you will be responsible for paying, and the dates those payments must be made. Your lawyer will be able to create a comprehensive document that will ensure that you both get good use out of the house without increasing tension.

You may also decide that one partner gets the family home and the other gets the vacation home. The complication here is in the valuation of each residence. If one house is worth significantly less, the spouse with the less expensive house can negotiate additional assets or benefits in order to balance the value of the two properties. However, if that house also has much lower expenses, the spouse with the more expensive home should insist that this benefit be factored into the negotiations.

 What about timeshares?

Treat a timeshare in the same manner you would treat a vacation home or vacation yacht or any other additional asset. First, get it appraised so you know what it is worth. Then, negotiate.

Get help

A seasoned divorce attorney can help you through all the nuanced legal and financial issues involved in divorce because we have helped many people through the process. Contact us here at Ulmer Law to see how we can help you, too.

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A Brief Guide to Uncontested Divorce in Pennsylvania

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An uncontested divorce occurs when both parties to the divorce agree on all of the main issues of the divorce. A couple may agree to property division, alimony and child support. However, the couple will still need to file a number of forms with the court, whether or not it is contested.

In addition, one party in the divorce must have been a Pennsylvania resident for six months prior to the beginning of the divorce. There must also be grounds for the divorce.

Two no-fault grounds exist in Pennsylvania. To obtain a divorce by mutual consent, both parties must agree the marriage is irretrievably broken and wait 90 days after the divorce action is served on the other side. The other no-fault divorce is a separation in which one party does not consent to the divorce and the parties have lived apart for a certain period of time. For divorces in which separation occurred prior to December of 2016, there is a two-year separation divorce, and for those who separated after December of 2016 there is a one-year separation divorce. Less common is a divorce on fault grounds, which include desertion, adultery, endangerment, “cruel and barbarous treatment,” one spouse’s imprisonment for at least two years or for “indignities.”

For a consensual no-fault divorce, the couple must agree to a Property Settlement Agreement if there are assets or issues of alimony. This agreement will divide the marital property according to a mutually negotiated settlement and award or waive alimony. The agreement may also lay out custody and child support, or these can be left to separate agreements or to court. Custody and support in Pennsylvania are not necessary to resolve before a divorce is granted. If there are no assets and no issues of alimony, you will not need an agreement just the divorce.

If the couple cannot agree completely on all issues, the divorce may still be no-fault but the issues will need to be litigated. In a contested divorce a family court judge will decide all issues according to Pennsylvania state law. This includes dividing marital assets equitably (not necessarily equally) and ordering child custody according to the best interests of the child as well as child support. In Pennsylvania these are all heard separately.

An uncontested divorce is often the result of mediation. In mediation, both parties to the divorce use a trained mediator to agree to the basic terms of divorce. Each party is still represented by an attorney, but the issues are all decided out of court. Mediation can provide the divorcing couple with a less acrimonious process, one that is managed privately.

Whether the divorce is contested or uncontested, each party should be represented by an attorney. A divorce lawyer can protect your rights and interests in divorce and ensure that your transition to post-divorce life goes as smoothly as possible.

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The differences between separate and marital property

When going through a divorce, people should be aware of the differences between marital and separate property.

Filing for divorce in Pennsylvania or anywhere across the country for that matter is not always a simple process. There are many issues that must be negotiated before the final divorce settlement is created and approved. One of the most difficult tasks for people to accomplish is that of dividing the marital property. Determining who is entitled to what after years of marriage can be hard, as there may be strong emotional ties to certain items. It is important for people who are entering into the divorce process to understand the differences between marital and separate property so that they are more likely to receive everything they are entitled to in the settlement.

A look at marital property

In addition to the family home, vehicles, furniture and other basic items, marital property includes a wide- range of items, including any assets and property that were amassed throughout the marriage. Marital property also includes, but is not limited to the following:

· Lottery tickets winnings and income tax refunds.

· Memberships to exclusive country clubs and golf courses.

· Collections, such as antiques, cars, coins, stamps, art and books.

· Intellectual property, such as trademarks, copyrights, patents and royalties.

· Term life insurance

· Gifts given to one another during the marriage.

Furthermore, if one spouse lent money to someone during the marriage, that money is subject to division once it is paid back.

Not everything is marital

In some cases, people may have separate property, which is not eligible for division in a divorce settlement. Separate property includes items that were owned by either party prior to becoming married, such as real estate or assets. Any inheritance money, gifts given by a third-party or personal injury compensation that was awarded to either party before, during or after the marriage is also considered separate property.

There are some instances where marital property may be divided between a couple. For example, if the title of a property was in the original owner’s name, but he or she had it revised to include the other spouse’s name, it is no longer considered separate property. Similarly, if separate money belonging to one spouse is deposited into a joint bank account with the other spouse’s name attached, that money may become marital and eligible for division.

Upholding your rights

Going through the divorce process can be extremely emotional, making it difficult to make decisions that will affect your future. An attorney may be helpful in answering your questions, giving you essential information and assisting you throughout the divorce process.

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