Tricks Spouses Play To Hide Assets

Tricks Spouses Play To Hide Assets

From time to time, I will try to outline some of the ways that spouses try to hide assets. There are so many ways. Typically, an attorney can hire a forensic accountant to investigate claims of hidden assets. Other times, assets are not exactly hidden, but it takes a very knowledgeable divorce attorney to figure out what they are and how to deal with them.

I want to talk about two specific examples, one somewhat common and the other that is less common.

When your spouse has stock options, sometimes they are “vested,” which means your spouse can exercise them right now and they have a real value right now. However, sometimes, they are “unvested,” which means their value is up in the air, and they have a specific date when they can be exercised, sometimes at a specific price, sometimes based on the market price.

When you enter into a written Marital Separation Agreement, your attorney needs to understand that even unvested stock options are marital property. It is very difficult to craft a Court Order to exercise an unvested option, when the value and/or exercise dates might be unknown. Therefore, any agreement or Court order has to state that they will be divided by percentage, between both spouses as, if and when the holder exercises the options. The Court can even require the holder of the options to exercise them on the first available exercise date.

The second example is a bit more complex, and I just want to get you thinking about it. It is called an unfunded pension. Most pensions are covered by a Federal statute called ERISA, and the separate marital shares of each spouse can be divided by a document called a Qualified Domestic Relations Order (QDRO). However, a retirement asset that is not covered by ERISA cannot be perfected by a QDRO. Therefore, your attorney has to find “another way,” similar to above.

When choosing your divorce attorney who will represent you, you need to know the right questions to ask. If your spouse has stock options or retirement accounts, these are just a few of the tricks spouses can play!


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