Penalty for Hiding Assets in Divorce

Written by Yonatan Levoritz on June 2, 2025

When going through a divorce, honesty isn’t just a virtue; it’s a legal obligation. Failing to disclose finances can trigger severe consequences. The penalty for hiding assets in divorce cases in New York can be far-reaching, both legally and financially. Courts take this matter seriously, and if one spouse attempts to conceal income, bank accounts, property, or other financial information, they may face court sanctions, loss of assets, or even criminal charges. At The Levoritz Law Firm, we help individuals navigate these challenges and ensure they receive what they are rightfully owed.

What Does Hiding Assets in Divorce Mean?

In divorce proceedings, each spouse has a legal duty to fully disclose all income, property, and financial holdings. When one party attempts to obscure or underreport these assets, it constitutes concealment and can significantly impact the outcome of the case. This can include undisclosed income, real estate, business interests, offshore accounts, or hidden investments. In New York, both spouses must complete a sworn Statement of Net Worth that details assets, liabilities, and expenses. Providing false or incomplete information may lead to contempt of court and other legal consequences.

A hidden asset is typically an item of value that is omitted or undervalued on financial records, often within a business, to influence the outcome of equitable distribution.

Tactics used to hide assets may include transferring funds to relatives or friends, deferring bonuses or commissions, undervaluing property or businesses, and creating undisclosed bank or crypto accounts to avoid equitable division.

Why Do Some Spouses Hide Assets?

Spouses may hide assets in an attempt to keep more than their fair share of marital property. This behavior can stem from resentment, fear of financial insecurity, or an effort to manipulate child or spousal support obligations.

New York follows the principle of Equitable Distribution, which means assets are divided fairly, not necessarily equally. Because “fair” is determined by the court based on multiple factors, one spouse might feel compelled to conceal assets to influence the outcome.

Common motivations include a belief that they earned more and therefore deserve a larger share of the marital property, distrust that the court will divide assets fairly, a desire to punish the other spouse, or anxiety about future financial stability.

Legal Penalties for Hiding Assets in a New York Divorce

The penalty for hiding assets in divorce can significantly impact the outcome of your case. In New York, courts take financial deception seriously. Depending on the severity, consequences may include asset forfeiture, fines, sanctions, or even jail time.

Here are some of the legal repercussions:

• Loss of credibility: Judges may question the integrity of the person’s entire case, which can weaken their overall position during proceedings.
• Contempt of court: Failing to disclose assets can result in fines or even jail time, depending on the severity of the offense and prior behavior.
• Asset redistribution: Courts may award the entire hidden asset to the other party as a punitive measure intended to restore balance.
• Sanctions and legal fees: The court may require the dishonest party to pay the other’s attorney fees, along with additional costs incurred during discovery or litigation.

In severe cases, asset concealment can cross the line into fraud, opening the door to criminal charges such as perjury or tax evasion. New York courts do not take financial dishonesty lightly, and even a small omission can drastically shift the outcome of a divorce settlement.

How Are Hidden Assets Discovered?

Uncovering hidden assets often involves legal tools like subpoenas, depositions, and the expertise of forensic accountants. These methods can expose financial discrepancies that point to income, property, or investments a spouse failed to disclose.

Some common strategies to uncover them include:

• Hiring a forensic accountant to trace funds, especially in high-net-worth cases
• Issuing subpoenas to banks, employers, and investment firms
• Analyzing tax returns for discrepancies between reported income and lifestyle
• Monitoring spending habits or unusual transactions
• Examining business records for unreported income or asset undervaluation

Evidence from emails and mobile payment apps can also play a significant role in revealing suspicious financial behavior.

What to Do if You Suspect Your Spouse Is Hiding Assets

If you believe your spouse is hiding assets, take immediate legal action by consulting a divorce attorney. Do not confront your spouse directly or attempt to investigate without legal guidance, as it may harm your case or violate the law.

Instead, follow these steps:

• Document everything: Keep records of financial statements, emails, and transactions, as well as any suspicious communications that may support your claims.
• Avoid moving or hiding assets yourself: Courts will scrutinize both parties, and engaging in similar conduct can harm your credibility.
• Request formal discovery: This legal process compels your spouse to disclose all assets under oath and allows your legal team to demand relevant documents.
• Seek temporary court orders: A judge can freeze accounts or require financial disclosures to prevent any further asset concealment before final judgment.

Timely legal intervention can prevent long-term financial damage and ensure your rights are protected.

How a Divorce Lawyer Can Help You

A divorce attorney is critical in helping you uncover hidden assets and securing a fair financial settlement. At our firm, we take immediate steps to protect your interests by initiating discovery, evaluating financial documents, and collaborating with forensic experts when needed.

Here’s how we support you:

• Filing court motions to compel financial disclosure
• Interpreting complex financial documents to uncover inconsistencies
• Coordinating with investigators or accountants in high-asset cases
• Presenting strong evidence to the judge if concealment is discovered

Every divorce case comes with its own challenges, which is why we take the time to understand your situation and advocate for you with care and precision.

Book a Consultation With a Manhattan Divorce Attorney Today

Don’t let concealed finances jeopardize your future. If you suspect your spouse is hiding assets, act quickly. The Levoritz Law Firm has extensive experience uncovering hidden assets in high-conflict and high-net-worth divorces, and ensuring courts impose the appropriate penalty for hiding assets in divorce when necessary. Call us today at (718) 942-4004 for a confidential consultation, and let us protect your financial interests with the skill and advocacy you deserve.