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Unmasking Hidden Assets in an Ohio Divorce Cases

Unmasking Hidden Assets in an Ohio Divorce Cases
March 19, 2021 Shannon Dawes
The Conciliation Process in an Ohio Divorce

Under Ohio Family Law, the courts consider the resolution of financial issues in an Ohio divorce to have a significant economic impact on the financial security and standard of living of both the couple’s children and the spouses. If the divorce is a high-net-worth divorce case, these fiscal matters’ complexity increases during the high net-worth divorce proceedings. Most wealthy divorcing couples are self-employed business owners. If a spouse does not receive their income from traditional sources of income such as hourly wages reported on W-2 statements, it is common that the spouse will attempt to hide income, hide assets, and otherwise try to manipulate the financial matters such as child support, property division, and alimony (referred to as “spousal support in Ohio).

The process of finding underreported income and hidden assets in an Ohio divorce case is one of the most critical and difficult tasks in a high-value marital estate. The matters can become even more challenging when a divorce has been “pre-planned” for a moderate period prior to the actual commencement of the proceedings. For example, a spouse who intends to obtain a divorce may attempt to shield an asset by transferring one or more marital assets to a third-party, acquiring new assets using a straw purchaser, or failing to make disclosure of cash payments. Should a spouse use third-parties, falsified documents, or straw purchasers to prevent a judge from analyzing specific marital assets or determine actual income, our divorce attorney will expose these actions and help our client obtain leverage and a fair divorce settlement of marital assets, child support, and spousal support orders.

Using Discovery to Uncover Secret Income and Assets in an Ohio Divorce

Attorney Shannon Dawes, an experienced and dedicated divorce attorney, understands that the cost of discovery must consider the client’s financial benefit. When the value of the marital estate is significant, more discovery efforts will often be justified. The discovery process usually begins with service, financial interrogatories, subpoenas, depositions, and document production requests. Should your spouse fail to comply with these discovery instruments, our firm can file a motion to compel the documents’ production, which urges the judge to impose sanctions (penalties) for non-compliance.

In some high-net-worth cases, more extensive investigation procedures might be needed. Our divorce lawyer routinely looks beyond the raw numbers in profit and loss statements, tax returns, credit card invoices, bank records, and comparable financial documents. When we find discrepancies, this information may be used to show the court that there have been misrepresentations or non-disclosure of income or assets by a spouse. A meticulous review of the financial documents or funds tracing can expose attempts to divert assets or income to other entities or individuals.

Strategies to Prevent an Equitable Distribution of Marital Property

The tactics used to prevent an equitable distribution of marital property vary widely depending on the nature of the property or funds a spouse is trying to keep from the purview of a spouse and judge. Some examples of approaches a spouse might use to prevent fair orders regarding marital property, alimony, or child support include:

Moving Assets to Other People or Entities:  Motor vehicles, money, personal property, real estate, investment certificates, and other financial assets may have been titled in the name of friends, relatives, attorneys, or other business entities.  

Safety Deposit Boxes – In some circumstances, a spouse might hide jewelry, investment certificates, cash, property titles, and other assets in undisclosed safety deposit boxes.

Deferring Compensation, Bonuses, or Commissions:  A spouse facing a divorce might make arrangements with an employer or company to reduce their compensation package’s total value. Some spouses will use tricks such as deferring bonuses, commissions, or other forms of compensation temporarily to artificially lower their financial situation.

Family Business Undervaluations:  If a family business is at stake, some spouses will try to undervalue the business to reduce the liabilities owed to the other spouse during the property division part of the divorce. The actual value of a business could be distorted by under-reporting P&L statements, tax returns, or revenue on financial statements. A spouse might leave off business assets to reduce the value of the family business. In some situations, a business valuation expert should be hired to prove the spouse is misrepresenting the true value of the business.

These are only a few ways divorcing spouses might try to hide property and funds during high net-worth divorces in Ohio. If you have questions about the equitable distribution of property in a divorce, we welcome the opportunity to talk to you and answer your questions. We invite you to call Dawes Legal, LLC at 614-733-9999 or submit an inquiry form through this website to schedule your initial consultation.