Divorce & Hidden Money: Collecting Evidence About Assets Concealed By A Trust, by Fred Abrams, Asset Search Blog

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Mroy post ‘Four Asset Concealment Tools‘ says that assets can be hidden by fraudulently transferring them to a trust. This 15th post in the ’Divorce & Hidden Money’ series concentrates on the evidence a divorcing spouse might try to collect if marital assets are concealed by a trust.

A spouse can use the pretrial discovery phase of a divorce to gather evidence about any marital assets concealed by a trust. Based on this evidence, the divorcing spouse may be able to credibly argue that assets at the trust are marital property subject to distribution by the Court. A divorcing spouse might also claim the trust was void if the trust was ‘self-settled‘ (i.e. the grantor and beneficiary were found to be one and the same). Under certain circumstances a divorcing spouse can additionally assert the trust veil should be pierced because the trust wrongly concealed assets &/or facilitated fraudulent transfers. See Babitt v. Vebeliunas (In re Vebeliunas), 332 F.3d 85, 91 (2d Cir. 2003) (discussing New York cases where right to pierce trust veil was preserved). . . .