When spouses go their separate ways, mistrust regarding finances is not uncommon. The law does compel divorcing couples to openly and honestly disclose all assets, income, expenses and debts to each other. Lying or attempting to cheat the process in order to hoard a larger share for oneself is known as divorce fraud – and New Jersey courts take it very seriously.
There is good reason you should too. A 2018 survey on financial infidelity by the National Endowment for Financial Education revealed:
Although divorce fraud isn’t always easy to uncover, our New Jersey divorce lawyers know there are some telltale red flags, as well as avenues we can pursue to protect our client’s best interests and financial future.
Who Commits Divorce Fraud?
Divorce fraud is most common where one spouse handles all the finances and the other is largely in the dark, unaware of most assets and liabilities. There’s nothing inherently wrong with this arrangement so long as the marriage is strong. But if you’re going through a divorce, it is critical both parties have a full picture of their finances.
This can get complicated very quickly if you and your spouse have amassed a large savings, own businesses or have various life insurance accounts or trusts. Although this is not a problem solely afflicting the wealthy, it is true that the more money involved, the more places it may be possible to hide marital assets that should be subject to equitable distribution under NJ Rev. Stat § 2A:34-23.1.
Some examples of divorce fraud include:
Strategies like this are not only underhanded, they’re illegal.
Your Middlesex County divorce lawyer may need to work with forensic accounting professionals to trace the paper trail of funds, identify potential fraud and fight for you receive a fair divorce settlement.
Penalties for Divorce Fraud
New Jersey law requires both divorcing spouses to submit a Case Information Statement that details with documentation all relevant financial information. This form contains a signed oath for each party to swear the information is both accurate and complete and acknowledging that intentional deception is unlawful.
If a person is caught lying on these forms or purposely leaving out relevant information, courts can respond by:
Discovery of fraud, misrepresentation or misconduct by an ex-spouse during the divorce proceedings can also be grounds to set aside a previous divorce settlement and renegotiate the terms.
Identifying Divorce Fraud
While divorce fraud varies in type and scope depending on the motive and perceived opportunity, the ultimate objective is typically to keep one spouse from receiving the divorce settlement to which they are entitled.
Perhaps the two most common types of divorce fraud that can lead to an inequitable distribution of assets are misrepresentation of family income and hidden/missing assets.
As noted in a financial forensic investigator’s article published in the ABA Family Law Section eNewsletter, some possible red flags of divorce fraud to watch for include:
This isn’t a complete list. If you suspect your spouse of hiding assets or misrepresenting income, it is vital that you turn to a qualified Middlesex County divorce lawyer to handle your case.
To learn more about division of assets and debts in a New Jersey divorce, contact Rozin | Golinder Law today at (732) 377-3367.
