How Maryland Courts Address Hidden Assets In A Divorce

Divorce generally involves the division of marital property. Under Maryland law, both parties are required to disclose their assets and debts. Unfortunately, it is not unusual for one of the parties to attempt to conceal their assets with the hopes of gaining the upper hand financially. This is a serious offense under Maryland law. The consequences are dire for anyone who tries to conceal assets. 

Understanding hidden assets 

Hidden assets can take numerous forms. One of the spouses can misrepresent their income, move money to a friend or a family member, postpone bonuses or commissions earned, or keep bank accounts and investments secret. In other cases, assets like artwork, jewelry, or collectibles can be hidden or misstated.

No matter how it’s done, the end result is the same: to deny the other spouse their rightful portion in the divorce. 

The duty of full financial disclosure 

In Maryland, both sides must prepare a financial statement during their divorce. This is a sworn statement of income, expenses, assets, and debts. Failure by one of the parties to provide accurate information can result in severe legal consequences.

Discovery methods such as the subpoena, deposition, interrogatories, and document production can be employed by an attorney to locate concealed assets. Sometimes, the services of the forensic accountant can be employed to analyze the flow of funds, tax returns, or business statements. 

How Maryland courts respond

When the courts hold that one spouse has deliberately concealed assets, several consequences may be imposed on the guilty spouse. These consequences include: 

• Property distribution adjustment – The court can also increase the percentage of the joint property given to the innocent party as a means of offsetting the guilty party’s fraudulent conduct. 

• Sanctions of attorney fees – The guilty spouse can be ordered to reimburse the other spouse for attorney fees or face financial sanctions. 

• Contempt of court – Failure to comply with court orders or making intentionally false disclosures of financial information can be considered contempt of court. 

• Reopening the case – If hidden assets are uncovered after the divorce trial, the courts in Maryland can reopen the case depending on the circumstances surrounding the issue.

The first thing to consider in Maryland divorce cases is fairness. In a divorce, everything is not divided evenly. Maryland is an equitable distribution state. That means property is divided in a way that is considered fair to both parties, not necessarily equal. Hiding assets goes against the purpose of the process and can tip the scales in the final outcome. 

Talk to a Bel Air, MD, Divorce Lawyer Today 

Schlaich & Thompson, Chartered, represents the interests of Bel Air, MD, residents who are going through divorce. Call our Bel Air family lawyers today to schedule an appointment, and we can begin discussing your next steps right away.