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Failure to disclose all finances could complicate divorce

Depending on the terms of a couple's divorce settlement, the use of proceeds from property division might either need to be disclosed or held confidential. Since a judge must usually sign off on an agreement before a divorce can be finalized, refusing to adhere to the terms of an agreement can be viewed as an act of contempt of court. Although the court does not necessarily keep track of every agreement and whether both parties are following it, one person can file a petition with the court to have the other held to the agreement.

In New York, the state's highest court is set to determine whether a man is acting in civil contempt over his refusal to disclose certain financial transactions. While full financial disclosure is a necessary aspect of the divorce proceedings, it is not entirely clear when these transactions took place, although it is likely that they occurred before the divorce was settled. Court papers indicate that, in 2009, he sold a property to the tune of $776,000.

In 2010, he was ordered by the court to deposit the profits from the sale. He refused, stating that he was no longer in possession of the money. When pressed for further information, he apparently refused to make any further comments. He backed up his refusal by pointing to the U.S. Constitution's Fifth Amendment, which protects him from being forced to incriminate himself.

Full financial transparency is crucial to obtaining a fair and equitable division of assets. Any information that is withheld can have an unfair impact on settlements, alimony or even child support payments. While the New York court will have to make the final decision in this man's case, couples going through the divorce process can avoid this future by ensuring that they provide the most up-to-date information possible during property division.

Source: cnycentral.com, "NY's top court considers contempt in divorce accounting", Sept. 10, 2015

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