Those who are preparing for divorce in New Jersey often worry about their finances after filing. People know they will need to share property and that their living situation and financial accounts may abruptly change.
One common tactic to better ensure financial solvency after an initial separation involves starting a hidden bank account long before one files. One spouse sets aside a little money from every paycheck to start preparing for financial independence. People operate under the misapprehension that assets solely in their name aren’t subject to division in a New Jersey divorce, and they sometimes put themselves in a very difficult legal position by taking this step.
Divorcing spouses who set aside or hide some of their income or property which they have acquired during the marriage may think that they can simply keep those assets, but they can end up in trouble during the divorce process because of their attempt at preparing for what is coming next in this way.
Spouses have to disclose their circumstances honestly during divorce
Those that litigate property division matters have an obligation to fully disclose their financial resources and obligations to both their spouse and to the family court. If either a New Jersey family law judge or the other spouse discovers that there has been a misrepresentation of someone’s assets, that could lead to multiple issues.
Judges will often impose a penalty related to hiding assets during property division matters. If one spouse can show that the other hid property to exclude it from division, the other may face consequences when the judge rules on their case. It is common practice for judges to award most or even all of the hidden assets to the other spouse as a way of punishing the party that misrepresented their circumstance.
Having a separate bank account to pay for rent and other basic expenses shortly after filing for divorce is a reasonable way to prepare. However, people will still have to disclose that money and any other assets that constitute marital property as they prepare for property division matters. Especially in high-asset marriages, spouses may have plenty of incentive to hide property, and they also have reason to bring in professional help to locate hidden assets.
Understanding how hidden assets can harm someone during a New Jersey divorce may help an individual to better manage the disclosure and property division process. Seeking legal guidance can lead to more informed decision-making as well.