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One state may be a haven for hidden divorce assets

One state may be a haven for hidden divorce assets

Even Michigan divorces that do not involve a large marital estate can have instances where one spouse tries to siphon off and hide part of the couple’s assets. When the couple is wealthy and has accumulated much property, this is even more common. An extreme example of this occurred in a Texas divorce where one billionaire used secretive trusts to whittle the marital estate down to $12 million.

South Dakota law allows for asset trusts in the state and provides these trusts with very liberal guidelines that give them virtually unlimited protection. Even some foreign tycoons move money to South Dakota when they want to shield it from their own government. Here, the Texas billionaire created a series of trusts in South Dakota and proceeded to move virtually all of his and his wife’s assets into them. He then changed the beneficiary on the trust to someone other than his wife.

Now that the couple is in the midst of a divorce, the wife is finding it virtually impossible to access these trusts or even information regarding them. South Dakota law renders these trusts practically airtight. She is on the verge of ending up with almost nothing from the divorce. There is a trial in the near future, but the authority of the Texas court to do anything about these South Dakota trusts is questionable.

In any divorce, legal counsel may be helpful to make sure that a client’s rights are respected to the fullest extent possible. The need for a family law lawyer is even more pronounced when the couple has a significant amount of assets. Here, there is more of a risk that one spouse may try to engage in deception or subterfuge to keep assets out of the marital estate and reduce the amount of money to which their spouse is entitled.

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