Common property division principles rules apply in a high-asset divorce. However, a recent article cautions that special fact-finding measures should be employed to protect oneself during this type of divorce. A law firm that focuses on divorce and property division issues can investigate whether assets were properly transferred.
Specifically, the article profiled a divorcing wife who suspected that her husband had hid marital assets in offshore shell companies. In fact, she learned that there are firms that help individuals to create such shell entities for the sole purpose of transferring assets before a divorce.
In general, a Tennessee family court won’t look favorably on a spouse that hid assets and/or lied about the inventory of assets in the marital estate. An attorney can utilize discovery techniques to require a spouse to answer hard questions about his or her assets. Such tools include both written discovery and in-person depositions taken under oath. A spouse that misrepresents the truth in his or her deposition or written interrogatory answers could be subject to court penalties, such as contempt of court.
Yet there is also a distinction between hiding assets and taking a proactive approach to protecting them. In the case of business assets, a prenuptial agreement might expressly exclude certain property from the marital estate. An LLC or corporation formed before marriage may also be a valid asset protection strategy. Those business forms are considered separate legal entities, and consequently can hold ownership of assets apart from the marital estate. However, take care to avoid commingling, as in the case of using marital assets to pay business expenses.
Source: Lexington Herald-Leader, “When it comes to divorce, the rich really are different,” Will Fitzgibbon, April 4 2016