The process of dividing marital wealth is a central component within many divorce cases. In order to achieve a fair division of marital wealth, both spouses must fully disclose all of their assets, whether they are believed to be marital or separate property. Without comprehensive knowledge of the scope of assets, it is impossible to negotiate a property division settlement that is fair and within the guidelines of Virginia law. Unfortunately, many spouses seek to hide assets from their spouse, which violates laws regarding both divorce and taxation.
When a spouse has amassed a significant volume of wealth, he or she often feels as though dividing that wealth during a divorce is unfair. Seeking to protect a portion of his or her assets from property division, some spouses will look for ways to shelter that wealth. According to recent reports, there are numerous foreign law firms that are all too eager to assist. A recent hack into the computers of one Panamanian law firm has led to an eye-opening glimpse into the lengths to which some wealthy spouses will go to hide assets during a divorce.
One method commonly chosen to conceal wealth is the establishment of an offshore corporation. Assets can be transferred into the corporation and then used to purchase valuable pieces of art, antiques or other property. If the owner’s spouse is unaware of the existence of the offshore corporation, he or she will have little chance of uncovering those assets, which will effectively remove them from the property division process.
Fortunately, there are professionals known as forensic accountants who are trained to scour a family’s financial documents to look for signs of hidden assets. Once a discrepancy has been discovered, the accountant can then trace those items to their source or destination, which often reveals holdings that were intentionally left out of the property division process. From that point forward, the Virginia spouse who attempted to hide assets will have to address his or her violation of both state divorce and federal tax laws.
Source: news.vice.com, “Divorce: One More Reason Why the Super Rich Want to Hide Their Money“, John Dyer, April 14, 2016