How Some Spouses Undervalue Investments & Hide Assets
Undervaluing stakes in business ventures is one of the many dirty divorce tricks. The true value of a stake in a company is sometimes hard to realize. This is especially true when it comes to marriages where only one spouse has primary control over financial matters. In some marriages it is common that the “bread winner” has sole knowledge of income, budget, and expenditures – everything related to the financial aspect of the relationship. This family dynamic can have a dire impact in the event of a divorce. When everything is good during a marriage, it is hard to imagine that a spouse would be capable of committing such an act of betrayal. However, this form of asset hiding is a very common occurrence.
Undervaluing occurs during the financial disclosure process of the divorce proceedings. The spouse with the business interests reports a number that is supposed to be contingent on the real value of his or her stake in the company. This number is sometimes reported as less than its actual, or real value. This can be done in numerous ways. However, the process of how it is undervalued is not as important as the ability to realize it has been undervalued to begin with. Without this knowledge of the financial dealings within the marriage, it can be difficult, or impossible to discern whether the value given is true, or undervalued.
It is for this reason that it is important for both parties to be equally involved with every financial aspect of the marriage. It is the responsibility of both spouses to have full knowledge of all business endeavors, financial transactions, and asset stakes. When this responsibility has been exercised, it would be more difficult for one spouse to undervalue a stake or asset during the financial disclosure. If you feel that your spouse has undervalued a stake in a business venture, it is imperative that this is dealt with immediately, and before a final decision has been rendered.
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