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Asset trusts play role in billionaire divorce

On Behalf of | Jun 4, 2020 | Divorce

It could come as a shock to some people in New Jersey who are going through a divorce that a spouse has been hiding assets. This was the case for one woman in Texas. She and her husband married in 1989, and over the years, they acquired a fortune worth billions of dollars. Among their assets were yachts, a private island, several homes, and expensive tapestries.

When the man filed for divorce in 2017, his wife assumed that half of this shared property would be hers. However, she learned that her husband had placed nearly all of it in asset trusts in South Dakota. Her husband’s attorneys listed the marital property as $12 million, not the more than $2 billion she expected, with the rest belonging to the trust and not the couple. With her legal bills already in the millions, the woman estimated that she might have nothing left once they were paid off. She filed a lawsuit in 2018 arguing that the trusts were created with the purpose of cutting her off from marital assets, and the divorce was supposed to go to court in April. However, the pandemic has delayed that indefinitely.

The prominent case highlights South Dakota’s asset trusts. People from around the world are using them to protect billions from taxes and divorce.

However, people do not need to have fortunes in the billions or secret trusts to hide assets. They may do it in simpler ways, from cleaning out a bank account and hiding the cash to tinkering with financial records for a small business. While many couples prefer to try to use alternative dispute resolution methods, such as mediation or arbitration, to reach a divorce settlement, it may not be possible in these case. An attorney may help a client in this situation prepare for litigation.