Taking Legal Challenges Head-On

The rich can move money to South Dakota to hide it

On Behalf of | Jun 1, 2020 | Firm News

A Texas divorce will require that the assets be divided between the husband and wife. This means that the spouses exchange information about their property because anything acquired during the marriage is subject to division. However, some spouses may engage in deception or other tricks to keep as much property as they can for themselves. This will generally get that spouse in trouble with the judge if it is discovered.

However, the ultra-wealthy have their own secretive haven for their money that they can take advantage of to shield it from things like lawsuits or divorce. For example, one Texas billionaire moved nearly all of his money to South Dakota so that he could keep it from his wife in the divorce. This is legal because the laws of South Dakota provide for trusts that are virtually impenetrable and practically secret.

The wife learned the truth about the money after her husband sent her a letter requesting a divorce. It turns out that the billionaire originally listed his wife as the beneficiary of the trusts but then switched it to someone else. The wife reportedly thought that the money was held in trusts so that her husband could avoid paying taxes on it. Now, faced with a total marital estate of $12 million, she now knows that the trusts were started to keep her from getting the money.

Those who are concerned that their spouse may be hiding or undervaluing assets might hire a divorce attorney to help them track down where the money has gone. The attorney may then file a lawsuit to seek to have the court compel the other spouse to include the money as part of the marital estate. A court will generally find a way to punish a spouse who the judge believes is hiding assets.