Are those ‘business loans’ an attempt to hide assets?

by | Jul 18, 2020 | Complex Property Division

You file for divorce, and your spouse is less than pleased. Life goes on as you sort out the details, however, and your spouse often invests in other businesses all across the state. As you start digging into the financial details, you find numerous transactions where he or she has given money to friends.

Transferring assets is one of the main ways to hide those assets during a divorce. The spouse who is attempting to hide the money often makes an arrangement with the other party to transfer the money back after the fact.

In this case, your spouse simply says that those are business loans. You have friends who are not as wealthy as you are but who still have business ideas that they want to explore. Your spouse claims that he or she was investing in those businesses, just like normal, and that it’s not an attempt to hide the money at all.

But is that true? Or did your spouse simply tell their friends to make up stories about businesses they never planned to open? Are they going to wait until your divorce is in the books to decide to “close” the business and give the money back to your spouse?

This type of thing does happen. You need to be very wary of any financial transactions during a divorce. You may have a right to that money, and your spouse could try to deprive you of that right, no matter how sound their story seems. Hiding assets is illegal, though, so it is important to look into your legal options if you believe that this is happening.