Is It Possible for One Spouse to “Hide” Valuable Assets from The Other in Case of Divorce?
A recent, highly publicized story on one billionaire divorce and the associated secret world of trusts discovered hidden in South Dakota highlights what anyone going through a high net worth complex divorce should know when it comes to the state’s protective trust laws, which are quickly becoming a shield for many who aren’t even located in South Dakota seeking to effectively hide their fortunes and keep them a secret from their spouses in case of divorce.
In a nutshell, individuals can create trusts in states like South Dakota in order to hide income and property that would otherwise be designated and considered personal assets and income to be divided as marital property. Other states that also provide formidable trust protection like this include Delaware, Nevada, and Alaska. All have arguably gone as far as possible, while also trying to stay within the law when it comes to accusations that they are enabling asset hiding. However, there are sometimes challenges brought from courts in other states that have different statutes governing trusts.
Using States Like South Dakota to Create Trusts & Keep Them Out of Spouse’s Reach
When these assets are owned and controlled by the trust, they are not considered to be marital property subject to equitable division, even when the couple never resided in South Dakota. In addition, in South Dakota, the spouse establishing the trust or transferring the assets is not required to notify the other spouse of any changes that limit or shut out the other spouse’s interests. Trusts in South Dakota are also perpetual in that they are not limited by time and the state provides them with significant asset protection; not only against creditors; but also spouses.
As a result, in the highly publicized case of the Bosarges, Marie Bosarge has been left in fear that she may end up with little-to-nothing after paying her legal fees because almost all of the property, including homes and jewelry, was reportedly placed into a special trust by her husband while they were married, which protects the assets from any claims.
Information Protection Makes It Difficult to Find Even Basic Details About the Trusts
These trusts are also effectively provided with privacy rights. As a result, even attorneys have a difficult time finding out basic details about them through available channels such as discovery due to information protections that the states provide, such as placing nondisclosure orders on attorneys and filings in divorce cases.
If You Live in Florida and Have Concerns, Contact Our Orlando Complex Divorce Attorneys
The Arwani Law Firm offers comprehensive divorce representation in complex divorce cases involving high value, complex assets. We are prepared to aggressively protect your interests during divorce. Contact our Orlando family attorneys at the Arwani Law Firm, PLLC today to obtain a free consultation and find out more.