Fraudulent Transfers and Concealment of Assets in Divorce

Description

One of the critical tasks in litigation is the identification and preservation of marital assets. Whether to divide the former spouses’ ownership interests in jointly held personal or business assets, or calculate the amount of spousal or child support obligations, determining the nature, value, location and accessibility of marital property is central to dissolution process.

Divorce litigators challenged with the prospect of an opposing party actively dissipating or absconding with marital assets have the option of seeking relief from the court in the form of a preliminary injunction or other restraints to prevent such losses. However, if granted, the order may lack the reach to marshal the assets to prevent their dissipation by the subject parties.

The appointment of a receiver, while usually only considered in business disputes, offers a formidable solution for divorce practitioners. Further, because the marital estate is subject to receivership after appointment, the receiver can implement previously unenforced orders, move the matter more efficiently toward settlement, or otherwise resolve the case. In some jurisdictions, family law judges have broad discretion to appoint a receiver. In other cases, the appointment of a discovery master may be helpful to identify and preserve the assets.

In some cases, however, it is discovered that fraudulent transfers already occurred, thereby raising the often difficult issue of how to recover the transferred assets or otherwise obtain reimbursement. This can necessitate such action as amending pleadings to join the party who received the fraudulent transfer as a party to the divorce litigation.

Listen as our distinguished panel discusses the benefits of this and other extraordinary remedies available to family law attorneys trying to preserve marital assets or enforce interim and final support orders in divorce proceedings.