In a California divorce, when couples have significant property, one of the risks is that a spouse will take steps to hide assets to keep them out of the marital estate. This is exactly what happened in one billionaire divorce. The problem is that the method chosen by the husband is legal under the laws of one state.
The husband built a fortune in quantitative trading. He methodically moved most of that fortune to trusts that were established under the laws of South Dakota. Most people do not realize that South Dakota is a haven for those who are looking to shield their money. However, many wealthy individuals fully know about the advantages that they are offered under South Dakota law. This includes foreign oligarchs and Chinese tycoons looking to hide assets from their own governments.
In this case, the husband had secretly switched the beneficiary on his South Dakota trusts. However, the law in the state did not require him to inform his wife, who was the original beneficiary. He then proceeded to engage in an affair and informed his wife of his decision to seek a divorce by registered mail. Now, the wife is completely unable to touch the assets that are held in South Dakota. What was once a marital estate that exceeded $1 billion has now been reduced to $12 million as far as the wife is concerned.
In a high-asset divorce, there is always the risk that one spouse will try to shield property and siphon it from the marital estate. A divorce attorney may be able to help their client prevent this from happening by seeking information about finances during the discovery process. It can be very difficult for a spouse to locate and track down assets on their own given the steps that people take to hide property. The attorney may also represent an individual in court if negotiation about the property cannot be reached.
