On your wedding day, when you exchanged vows and said your “I do’s,” you were promising to be faithful to your spouse in all ways, including financially. Did you know that spouses owe a fiduciary duty to one another? This means that if your spouse lies to you about their finances or a past criminal conviction, this can be considered fraudulent. When you owe a fiduciary duty to another person, then concealing funds, wasting marital assets, and opening hidden bank accounts represent a breach of that duty.

When you are in the process of getting a divorce, each spouse has the responsibility to disclose every detail of their finances regarding assets, liabilities, income and expenses including joint property and debts and separate assets and debts. Although separate property is not subject to asset division in Tennessee divorce, a spouse who has separate property must disclose all of it in discovery. The failure or unwillingness to disclose financial information can result in penalties that the court can impose such as:

• Holding the party that is trying to hide assets in contempt of court
• In some cases, the party hiding assets can be prosecuted for perjury
• Court-imposed sanctions such as being ordered to pay the other party’s attorney fees and other costs incurred because of the other party’s failure to disclose financial information.

If you suspect that your spouse may be hiding assets, you can talk with your Nashville divorce attorney about hiring a forensic accountant to go through all their financial documents to see if they can find evidence of undisclosed bank accounts, investments properties or other assets that you did not know about.

A true example of what can happen if you hide assets

A cautionary tale about the pitfalls of trying to conceal a financial windfall can be found in the case of In re Marriage of Rossi (2001) 90 Cal. App. 4th 34. The wife in this case had won the lottery in a pool at work. Her share of the winnings was $1,336,000. After she won the money, she filed for a divorce, but failed to tell her husband that she had won the money, and did not include the jackpot in her financial disclosure documents for the divorce. Two years after the divorce, the husband found out about the lottery winnings. He took his former spouse to court in a post-judgment action, and the court ruled that the wife had committed fraud. The court awarded 100% of the lottery winnings to the husband.

So you see, you could stand to lose everything if you try to hide your assets. On the other hand, if you suspect your spouse of hiding assets, he or she could lose everything, too. In the end, honesty is always the best policy, no matter what the circumstances are.

The financial aspects of the divorce process in Tennessee can be complicated. We invite you to schedule an in-person or video consultation with a skilled Nashville divorce attorney from the Nashville family law firm of Miller Upshaw Family Law, PLLC. We take the time to listen, and we offer smart legal advice specific to your case. You are welcome to call 615-391-4200 or use our contact form to reserve an in-person or video consultation with our skilled family law team today.