Feb 11 2008
Hiding Assets in Divorce Mediation
I sometimes get questions about non-disclosure of assets by the partner of a spouse who’s thinking about divorce mediation. More often than not, the spouse is a wife who knows very little about the investments her husband has made. Sometimes there is an expressed lack of trust that feeds into the wife’s feeling of inadequacy in things financial.
I tell the caller that a mediator has several tools for dealing with the fear or reality that one spouse is hiding assets. First, the language of the mediation agreement that I use provides that each spouse “must disclose all relevant and material facts and information regarding the matters discussed.” The agreement also stipulates that the sale or transfer of community or separate property will not be conducted without mutual consent.
Second, I ask each spouse to disclose all assets and liabilities in writing with great specificity. If one spouse appears naïve about finances or the couple’s financial picture is murky, I will generally recommend that a financial consultant be retained to help support the couple and particularly the wife in gathering and evaluating the finances of the marriage. My job as a mediator is to do all I can to assure that both husband and wife have power to make decisions about their finances.
Last, but not least, I ask couples if is they want language in their final Memorandum of Understanding addressing non-disclosure of assets. For example, sample language might provide that if assets over a specified value (maybe $500) have not been disclosed, such assets are deemed owned 50-50 by the couple after their marriage has been dissolved.
Of course, none or this guarantees that hidden assets will ever be found. But discovery in litigation does not provide iron clad guarantees either. I do feel that mediation is probably not a good choice for a spouse with a deep persistent suspicion that her or his spouse is hiding assets. It doesn’t really matter if the fear is well grounded. If distrust permeates the negotiations, a successful outcome is unlikely.