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Full transcript by James Nolletti below.
I've seen financial misbehavior many times in high-net-worth divorce cases. One of the more effective ways for a wealthy spouse to hide money overseas is by using trust structures such as an off-shore asset protection trust. It has foreign trustees and involves transferring large sums of money to a foreign jurisdiction, thereby, in theory, placing those assets behind the reach of US court judgments. The foreign jurisdiction is usually selected because it has enacted special legislation that protects debtors against foreign creditors. Fortunately, these trusts do not usually work to prevent the unwitting spouse's team from discovering these assets. Unfortunately, the expense to reach such assets can be discouraging if not prohibited.
When it comes to foreign bank accounts as opposed to off-shore asset protection trusts, the spouse must report these accounts on their US federal tax returns, and the IRS can impose substantial penalties for failure to report foreign bank accounts. There is usually some type of audit trail, since no one is allowed to take large sums of cash out of or into the country. If international business is being conducted, there can be additional difficulties in finding and retrieving the marital portion of these assets.
