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What Happens If You Fail to Disclose an Asset or Income Source During a Divorce Settlement?


Whether a divorce is resolved by a voluntary settlement agreement or contested litigation, it is important for each side to fully and accurately disclose their finances to the other. Financial disclosure is key to resolving issues such as alimony, child support, and the overall division of marital property. If either spouse fails to accurately disclose their assets and income, it can lead a court to reopen a previously settled divorce.

Appeals Court: Trial Judge Was “Premature” in Dismissing Ex-Wife’s Claims of Fraud, Misrepresentation

A recent decision from the Florida Second District Court of Appeal, Hess v. Hess, illustrates the potential legal risks of failing to make accurate financial disclosures. This case involves a couple that married in 1998 and separated in 2013. The husband formally filed for divorce in 2017.

Initially, the divorce was not particularly acrimonious. The parties agreed to mediation and eventually entered into a marital settlement agreement (MSA). The agreement stated that both sides had made a “full disclosure to the other of his or her known assets” and income.

After the parties signed the agreement, but before a judge held a final hearing to approve its terms, the former wife’s attorney learned for the first time the former husband was receiving disability benefits from the U.S. Department of Veterans Affairs. These benefits were not disclosed during the mediation.

The former wife therefore asked the judge to set aside the agreement, alleging the former husband committed “fraud” by his failure to disclose. But when the hearing began, the judge immediately opined that no “fraud or misrepresentation” had taken place. After both sides presented their evidence, the judge reiterated this view and denied the former wife’s motion to set aside the agreement.

The Second District said the trial judge was out of line. The former husband clearly had a “continuing duty” to disclose his disability benefits. This duty applied even though, as the former husband pointed out, the disability benefits are not considered marital assets. The reason for this is that the benefits are still “a source of income” for purposes of determining alimony.

Given all this, the trial judge effectively “deprived” the former wife of her rights when he stated–even before hearing any evidence–that the former husband did not commit fraud or misrepresentation. The judge’s “premature findings” amounted to summary judgment in favor of the former husband, which was not justified under the facts of this case. The Second District therefore returned the case to the trial court with instructions to allow the former wife a new hearing on her request to set aside the marital settlement agreement.

Speak with a Boca Raton Divorce Lawyer Today

In any divorce case, it is important to carefully follow all applicable court rules and disclosure requirements. Failure to do so can lead to situations like the one described above. If you need advice or assistance from a qualified Boca Raton divorce attorney, contact WiseLieberman, PLLC, at 561-488-7788 today to schedule a consultation.




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