What Happens If a Spouse Hides Assets in an RI Divorce?
Rhode Island is an equitable distribution state. This means all marital assets and debts are divided in a way that is fair and equitable to both parties. This does not mean an automatic 50/50 split. For equitable distribution, both parties must be thorough, complete, and honest when disclosing their finances.
But many parties may be tempted to hide assets to prevent their partner from getting more money. Doing this is unethical and can lead to serious legal consequences.
If you are going through a divorce in Rhode Island, you will want to have a divorce lawyer in Providence, RI, who can fight for your rights and for what is legally yours. The team at Inman & Tourgee has the experience you can trust in these cases.
Common Ways Assets Are Hidden
Some people hide cash, while others resort to sophisticated maneuvers to hide their money. In Rhode Island divorces, family law professionals routinely deal with several ways people try to hide money.
Underreporting Income
Business owners or self-employed individuals may delay invoicing clients or accept cash payments without recording them. Other tactics include lowering their earnings until the final divorce decree is signed.
Overpaying Deferrals and Taxes
A spouse might intentionally overpay the Internal Revenue Service (IRS) or state tax authorities, planning to claim a substantial refund after the divorce is over. They may also defer workplace bonuses, stock options, or salary increases to show less income.
Fabricating Debt or Expenses
A spouse may create fake loan documents claiming they owe money to a close friend or family member. Then they may transfer marital funds to repay this non-existent debt.
Transferring Titled Property
Another tactic used to hide assets involves moving vehicles, properties, or liquid investments into the name of a third party or a newly formed shell corporation without the other spouse’s consent.
Funneling Cash Through a Business
Spouses may use a closely held family business to pay for personal luxuries. They may inflate legitimate operational expenses to lower the perceived value of the business.
Legal Consequences in RI
The Rhode Island Family Court requires both parties to sign and file a financial statement known as a Form 9.0 DR. This document is submitted under oath. When a spouse deliberately omits assets or falsifies data on this form, they are committing perjury.
If they do this, there can be several consequences:
- Disproportionate Asset Allocation: While Rhode Island is an equitable distribution state, Rhode Island judges can award a higher percentage of the remaining marital estate (sometimes up to 100% of the hidden asset itself) to the defrauded spouse as a penalty.
- Sanctions and Legal Fees: If a party is caught hiding assets, the court will frequently order them to pay 100% of the innocent spouse’s attorneys’ fees and any court costs associated with uncovering the fraud.
- Contempt of Court and Perjury Charges: A judge can hold the dishonest spouse in willful contempt. This can result in monetary fines or, in extreme or repetitive cases of fraud under oath, jail time.
- Reopening the Divorce Decree: If the deception is discovered after the divorce is finalized, Rhode Island law allows the innocent spouse to file a motion to reopen the case.
When you work with Inman & Tourgee for your divorce proceedings, we work diligently to ensure that neither spouse is hiding assets.
How Hidden Assets Are Discovered
Uncovering hidden assets requires several tactics to ensure that everything is accounted for during the divorce process.
Attorneys can subpoena documents such as bank or credit card statements spanning several years. This bypasses any gatekeeping by the deceptive spouse. They can also request depositions of the suspect spouse, business partners, or anyone else who may have helped hide assets.
In some cases, a forensic account is needed. These special accounts can perform lifestyle audits and track household expenses against reported income to find discrepancies.
Reviewing shared hard drives, cloud accounts, and metadata can reveal hidden cryptocurrency wallets or undisclosed foreign accounts.
All of these actions can help identify hidden assets and hold the responsible spouse accountable for attempting to hide them.
Protecting Your Financial Rights
If you suspect your spouse is hiding assets ahead of or during a Rhode Island divorce, it’s imperative to take legal action to protect your financial future.
There are several steps you can take:
Preserve documentation immediately. Secure physical or digital copies of joint tax returns, mortgage applications, and bank statements, before your spouse restricts access or changes passwords.
Monitor household and business lifestyle actions. If your spouse claims a sudden drop in income or corporate profitability, but household spending or travel habits remain unchanged, there is a problem. This discrepancy can serve as evidence in your case.
Consult an experienced family law attorney as early as possible. Attempting to investigate financial fraud on your own can be difficult. A family law attorney in Cranston, RI, can ensure that no privacy laws are violated and that everything is done legally.
At Inman & Tourgee, our team has the experience you can count on. If you are facing a divorce and suspect your spouse is hiding assets, we are here to help. Call us at 401-823-9200 or reach out to us online to schedule an appointment.
