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Helton Law Firm, PLLC

How does financial fraud affect a divorce?

During a divorce, sometimes it is suspected that one spouse is trying to hide assets from the other. Tennessee is an equitable distribution state, and thus judges will make their property division determinations on the basis of what they believe to be fair. When financial fraud occurs, it may appear to the court that there is less marital property than there really is, which can reduce the innocent spouse's share. Financial fraud is not typical, but when it occurs, a forensic accountant may be able to uncover the real financial picture.

Red flags that may indicate financial fraud include dishonesty about financial decisions, gifting or loaning money to family or friends, directing mail to an office address rather than to home, making cash withdrawals from bank accounts and hiding financial information on the computer from the other spouse.

Dissipation may also affect a couple's overall finances in a divorce. This occurs when one spouse wastes property or money without the knowledge or consent of the other spouse. It can take many forms such as gambling, not properly taking care of marital property, selling assets for significantly less than they are worth, excessive spending and failure to maintain payments on mutually owned property such as a marital home. If dissipation can be proven, the innocent spouse may be able to ask for a larger sum of money in court.

An attorney may be able to assist with some of these issues. An experienced divorce lawyer may be able to help a divorcing spouse decide whether or not a financial analyst might be helpful in a particular case and explain the effect financial fraud if it can be proven.

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