When a Maryland couple chooses to end their marriage, a large part of that process will involve negotiating the division of marital wealth. The early stages of property division include a full disclosure of assets. After all, spouses cannot negotiate how to divvy up their assets until a full accounting has been made. Unfortunately, there are many cases in which a spouse will take steps to try and hide assets during a divorce.
This topic has received a great deal of recent media attention following the release of a batch of documents known as the “Panama Papers.” More than 11 million documents were leaked after hackers broke into computers used by Panamanian law firm Mossack Fonseca. Many of those documents reveal ways in which the law firm aided clients who wanted to conceal assets from their spouse.
One approach that is used by many wealthy spouses is to set up one or more offshore corporations. Those companies are then used to purchase and store items of value, which can range from art to antiques and collectables. When the spouse feels that divorce is on the horizon, he or she can begin transferring assets into the offshore corporation, which makes it difficult for the other party to gain an accurate understanding of the full range of marital wealth.
Hiding assets is not only a violation of divorce law; it is also a violation of U.S. tax law. If a spouse fails to disclose offshore assets and is caught, he or she could face repercussions in both family law and federal courtrooms. It should also be noted that there are professionals who are trained to comb over a couple’s finances and uncover discrepancies that will lead to an offshore holding. For those in Maryland who feel that their spouse may be less than honest when disclosing assets, it may be worth the effort to contact a forensic accountant.
Source: news.vice.com, “Divorce: One More Reason Why the Super Rich Want to Hide Their Money“, John Dyer, April 14, 2016