Coping with Financial Challenges of Divorce Fraud in New Jersey
Identify the Alternatives to Protect Your Assets if You Suspect Your Spouse is Misrepresenting Financial Information While Navigating Through Divorce
Besides child custody issues, financial arguments are the most significant cause of conflict in divorce. It isn’t just arguments over who gets what, however. The arguments often go further into accusations of absconding with funds or assets or reporting less income. The state of New Jersey divides assets between divorcing couples through a system known as equitable distribution. This is a process where once the court has all of the financial information of the couple and each of them as individuals, decisions will be made regarding a “just” financial split. The messiness of owning a business, buying a house, buying a rental property, or other significant assets can lead to financial conflict. In cases where a couple has been married for a decade or more, the mixing of assets is more pronounced than in the case of divorce after less than five years, but that does not signify smooth sailing. Divorce fraud can be committed no matter how long a marriage lasts when a party is unwilling to provide accurate information or steals funds from marital assets.
Unmasking Financial Fraud in Divorce in New Jersey
Principally, a spouse will misrepresent their earnings, expenses, debts, and assets during a divorce to receive more when the assets are distributed. Equitable distribution means a fair split, not necessarily equal. A judge must determine how much each person contributed during the marriage.
Sometimes, a spouse may commit fraud by omitting assets or hiding money in offshore accounts. Any misrepresentation, such as claiming to loan large amounts of money to friends or family or buying land or real estate from a family member at an inflated price to increase debt, are some ways fraud is frequently committed. Tax fraud and insurance fraud are also often seen in these situations.
Divorce fraud isn’t just a problem for wealthy couples. The whole divorce process can be painful and bubble up bitterness and hurt feelings. Someone working a middle-class job is just as susceptible as a country club owner when it comes to an ex who is cooking the books to obtain a better financial stance in court.
Common and Dark Motives Behind Divorce Fraud
Fraud is more likely to occur when one spouse manages the household money. While this arrangement works for many couples, if the other spouse is kept entirely in the dark about the family finances, it can be more difficult to identify fraudulent activity. Couples with 6-figure savings account balances, several properties and businesses, and insurance and trust accounts are plagued more frequently with divorce fraud.
There are a plethora of motivations as to why someone would lie about their financial status or take marital assets on the sly. One of the most common is when the perpetrator has an affair and needs to fund their new life. Gambling addiction is a fast way to burn through 3 months’ worth of profits from the family gelato business. Gambling partners are keen on hiding their losses until every last dime is gone or borrowed. Other bad habits, such as alcohol or drugs, are more difficult to hide but are also motivators for divorce fraud. All of the above motivators for divorce fraud will appear eventually, although many times not before irreparable damage has been done.
How Can I Tell That I am Being a Victim of Divorce Fraud?
After having lived several years with someone out of place, behaviors are usually easy to recognize, while some partners write them off as mental constructs of their own making. Many red flags indicate something is amiss. When a partner becomes secretive about household finances, changing passwords to access bank accounts, demanding that important financial documents be signed without question or explanation, it could indicate fraud. About household accounts, if large transactions such as deposits, transfers, cash transactions, sale of stock, new accounts, loans, or credit cards appear, they could be signals of divorce fraud.
Anytime one partner forbids the other from reviewing banking and account information, it is not a good sign. Suppose a partner has a P.O. box or address for receiving bills and financial statements. In that case, Attempts to move money around to accounts to which there is no other access, lying about financial matters such as bills or income, attempts to sell properties or other assets quickly and under the table to obtain fast cash, loaning large sums to friends or relatives to decrease overall net worth are more red flags.
Some spouses will stop taking proper care of their vehicles, properties, and homes to decrease their value until the settlement has been decided temporarily. Needed renovations to a $500,000 home could increase its value by as much as half again ($750,000), meaning a significant increase to the marital home’s worth.
Occasionally, a spouse will spend heavily, racking up credit card balances and taking lavish trips to paint a picture of more significant financial need to the judge and lessen the amount divided between the couple.
Speaking of trips, if several trips overseas are taken to countries whose banking laws aren’t stringent or support banking secrecy for their patrons, there is a high probability that money is being taken there.
The most complicated situation occurs when a marriage owns a business (or more). Many signs indicate that a spouse may commit divorce fraud in the family business. Complaining about a sharp decrease in profits or expensive problems such as accidents, lost merchandise, etc., can be a setup to cover skimming from the till. Offering providers prepayment or overpaying vendors to get credit for future purchases and paying imaginary employees can temporarily lower the value of the business. Also, asking clients or customers to put off payment until the divorce is final can change the profit amount.
Whether it is a business or a household, anytime financial information, accounting software, tax returns, or other vital information is deleted from the family or office computer, it is a sign that divorce fraud could be afoot.
The Importance of Gathering Key Evidence to Protect Your Financial Interests
If you suspect fraudulent activity, accumulate as much financial information as you possibly can ahead of time before your ex begins to delete files, change their address to receive paperwork, or take other actions to keep you in the dark.
During the discovery process, your attorney should receive all the information you seek; however, the world is not perfect, and you may be required to hire a specialist.
You are going to need a forensic accountant. They are special financial bloodhounds trained to extract information from statements and ledgers to create a trail of where the money came in and went out. If there are any discrepancies, they will bring them to light.
Contact Our Offices in Brick or Sea Girt for Advice on How to Protect Your Assets From Divorce Fraud in NJ
The longer your list of financial assets, the more tempting it may become for your ex to hide or manipulate their value. The wisest strategy is to share your concerns with a divorce attorney from the Bronzino Law Firm. We have over 50 years of experience, and our investigative experts apply cutting-edge technology to get the information you need for your divorce in Sea Bright, Red Bank, Toms River, Tinton Falls, Eatontown, Berkeley, Freehold, and other Ocean and Monmouth County towns.
Our attorneys will listen to your concerns and create a unique strategy for your situation. We know how devastating divorce can be, even more so when the possibility of fraudulent financial actions occurs. Our seasoned, professional attorneys will provide you with the support, expertise, and guidance you need. Contact us today at (732) 812-3102 or contact us online. We are the solution to your divorce troubles.