Watch Out for These Often-Hidden Assets

These Marital Assets Can Stay Hidden During a Divorce

Financial issues can be some of the most contentious aspects of a divorce. Make sure to be aware of these types of assets to protect yourself from an unfair outcome.

When a couple makes the decision to divorce, the financial aspects can be some of the most complex and contentious. The two spouses may have a significant number of things to disentangle when it comes to real estate, investment funds, retirement plans and other assets, sorting out separate from marital property and achieving an equitable distribution Watch out for these common assets that may be more challenging to ascertain or divide.

Property Division in New Jersey

When you first visit your family law attorney, one of the most important things to have on hand is an accurate reflection of your marital finances. For example, you will want to have copies of your tax returns, bank statements, investment account statements, retirement plans, mortgages and home deeds, and insurance plans so you can provide these to your divorce lawyer. By understanding the types of assets and liabilities that you have, your family lawyer can provide advice about how to move forward with the divorce.

New Jersey is an equitable distribution state. This means that marital property does not need to be divided exactly in half by the judge. Instead, the goal is to produce a fair distribution of assets to both parties. The result can depend on the length of the marriage and many other factors. Separate property, like gifts, inheritances or assets one partner owned before the marriage, are largely excluded from the property division process, although there are some important exceptions.

Some couples, especially those who are amicable or who have a smaller amount of assets, may find it easier to reach a financial resolution to their divorce. However, those with significant property, investments and holdings may find it more challenging to agree on what kind of division is actually equitable. In addition, other financial matters like spousal support can become part of the marital settlement agreement. Alimony can be either temporary or permanent, and like other financial aspects of the divorce, it depends on a variety of factors.

Some couples may be at such odds over these questions that their divorce must be litigated before a judge, with both parties’ divorce attorneys making arguments and presenting expert witnesses in an adversarial process. In many cases, both spouses can save time and money by reaching a settlement outside of court by working together with their family law attorneys to arrive at a negotiated solution. In this case, it is important to consider your key financial priorities before going into negotiations.

Keep an Eye Out for Hidden Assets

In some cases, one partner may seek to hide assets from the other. This may be illegal and may lead to severe sanctions by the judge. Both parties have the responsibility to be transparent and provide factual information about their assets. However, some people have had offshore accounts, concealed payments to friends and family, and used other techniques in an attempt to keep these funds outside the divorce process.

Of course, hidden assets of this type are more common in a situation that includes both a high level of conflict and a high-asset divorce. In these cases, your family law attorney may advise you about expert witnesses, forensic accountants and evaluators that you can bring in to look for hidden assets and uncover deception. It is most worthwhile to do this when the sums involved are large enough to outweigh the expense in time and money.

However, there are other types of assets that can remain hidden, even if they are significantly smaller than a typical high-end offshore banking account. Spouses may deliberately try to hide them, relying on anonymity, or they may simply not think of them when compared to the well-known types of marital assets like real estate and investment accounts. By keeping these types of assets in mind, you can work with your divorce lawyer to protect yourself and your future.

Restricted Stock and Deferred Compensation

When one spouse is a corporate executive, restricted stock can be an important part of their compensation package. This kind of deferred compensation can be more challenging to value than an annual bonus. Because the restricted stock cannot be redeemed right away, it can be more challenging to value, and the ability to cash it in is tied to different metrics like employee performance, company goals or even length of employment.

Restricted stock can typically not be transferred from one party to another. However, some of the stock accrued during the marriage may be considered a marital asset. This may mean that other types of marital property are divided in such a way as to ensure that the spouse who does not hold these restricted units still receives an equitable share of the overall marital property. Valuing restricted stock units can be complex, and your divorce attorney could work with other professionals to establish a price, which must be accepted by the judge or negotiated with your spouse.

To prevent these assets from remaining hidden, keep in mind that restricted stock is a common feature of executive compensation. Ask your spouse for their contract or compensation plan in order to see whether restricted stock is part of the package.

Pension Plans

Retirement accounts, like IRAs and 401(k) plans, can be significant assets during a divorce. However, in addition to these defined compensation retirement plans, defined benefit plans like pensions can also be part of the marital estate. Government employees often have pensions, as do employees at certain companies. In either case, this future income can be accounted for during the divorce. Your divorce attorney can work with financial experts to seek a valuation for the pension that could be included as a marital asset.

Military Benefits

Military benefits are often not hidden assets in the traditional sense. Instead, people may simply be unaware of whether or not they can keep receiving these benefits after their divorce. Military benefits are not divided like other assets; instead, a former spouse can retain access to these benefits without impacting the other spouse, but only when certain conditions are fulfilled.

The standard is called the 20/20/20 rule. In order for the non-serving spouse to receive military benefits after the divorce, the military spouse must have served 20 years, the marriage must have lasted at least 20 years, and the military service and marriage must have overlapped for at least 20 years. If this applies to you, talk with your family lawyer about military divorce regulations.


Bitcoin, Ethereum and other cryptocurrencies are experiencing an explosion of popularity. Because cryptocurrency wallets are anonymous, it can be relatively easy for crypto assets to remain hidden. If you or your spouse hold cryptocurrency through an investment broker offering crypto alongside traditional stocks, bonds and mutual funds, it will appear on your investment statements. But if the crypto is instead held in a private wallet, either online or on a “hard wallet” device, it may be more difficult to track if you do not have access to it.

In addition, it can be challenging to properly value cryptocurrency. Given the high levels of fluctuation, both parties will need to agree upon a specific valuation date. The value of the crypto agreed upon during negotiations may change rapidly, even during the divorce process, and it could need to be reopened in case of a sudden drop in value. Your divorce lawyer may need to work with professionals with greater crypto knowledge if one spouse holds significant crypto assets or is suspected of hiding more.

Request a Consultation

The financial aspects of divorce can be some of the most challenging, and this includes ensuring that all assets are on the table. If your marriage is coming to an end, get in touch with the experienced New Jersey family law attorneys at Lawrence Law by calling 908-645-1000 or by filling out and submitting our online contact form so that you can schedule a consultation about your particular situation.

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