Legal Separation Advice: Hiding Assets

financial advice on divorceBy Daniel Exner

Divorce Lawyer, Cordell & Cordell

A somewhat common question from divorced dads looking for legal separation advice is what to do with property they want to protect in their divorce.

Can you sell property to a friend before the divorce then buy it back from the friend post-divorce so their spouse has no claim to it? What about putting an asset in a trust in your child’s name? What happens if the court discovers you were hiding assets or not being forthright with your intentions through the mentioned dubious techniques?

Of course, your ability to dispose of real estate will depend on the divorce laws and property statutes in your state.

Where I practice (Wisconsin), parties to actions affecting the family are prohibited from disposing of property owned individually or mutually without the consent of the other party or the court unless the disposition occurs in the ordinary course of business or is a necessity.

This prohibition begins as soon as the action is filed and continues until the court dismisses the action or renders a final judgment. Violators of the disposition prohibition may be charged with contempt.

Furthermore, each party must disclose any assets he or she disposed for the one year preceding the filing of the divorce. If those assets are unaccounted for or were used for a non-marital purpose, the court can factor those assets in the final division of property.

If a divorce action is currently pending and your state follows similar procedure, you will not be able to transfer your real estate to a trust even if you own the property individually.

If you decide to proceed with the creation of the trust, you should consult with an attorney to discuss the language of the document and the gift implications. If a divorce action is expected at some time in the future, you need to be very clear on your ownership rights which may remain in the property.

Another option that may be available to you is a marital property agreement or a post-nuptial agreement which would designate the property as your individual property that would be awarded to you in the event of a divorce.

Again, you should contact an attorney in your state to determine whether these agreement are honored by the courts in your jurisdiction and for additional financial advice on divorce. If so, there will be requirements for what the document must contain and how it must be executed in order to be enforced.

Consequences for hiding assets or trying to pull a fast one on the court can be severe. If you are caught attempting to conceal an asset you may be subject to penalties for contempt of court, which can result in fines being levied against you or, in extreme cases, in jail sentences.

divorce lawyer Daniel ExnerCordell & Cordell has mens divorce lawyers located nationwide. To schedule an appointment with one, including Daniel Exner, a Staff Attorney in the Milwaukee, Wisconsin, office, please contact Cordell & Cordell.

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