Hidden Assets Law and Legal Definition
Hidden assets are those which are purposefully secreted from disclosure to another. The issue of hidden assets commonly arises in tax and divorce matters, among others. For example, in dividing assets and payments between spouses seeking a divorce, a court often requires a financial disclosure statement to be filed by the parties. One of the parties may seek to misrepresent their financial status by hiding assets through various means, such as filing false documents and conveying assets to third parties.
The discovery of such hidden assets is often difficult and expensive. There are court procedures that may be employed to obtain discovery of such assets. The party seeking the information must seek cooperation from the other side; wait for results from interrogatories, subpoenas, and requests to produce. Often, a private investigator is hired. Sometimes, it is only by setting aside or modifying the existing judgment of divorce that can the aggrieved party receive some relief. Therefore, parties may include a “disclosure clause” in the divorce judgment saying all property has been disclosed by both parties. Language may be included that if a party does not reveal an asset, it may be subject to further discovery and future division as part of the marital property. In such cases, the property settlement involving known assets is final; however, if newly discovered evidence shows the parties undervalued or overvalued the marital estate, the aggrieved party has a basis to re-open the judgment or start a new lawsuit.
