As a result of the COVID-19 virus, we have closed our physical offices to protect the health and safety of our clients, staff, and business partners. We remain open and actively working (remotely) for both our current clients and those who may come to need our services. Please feel free to call our main office line at 215-649-7395

Graff & Associates, LLC - Family Law
Helping You Thrive, Not Just Survive
Consultations are free & Confidential

South Dakota allows the rich to shield money

Pennsylvania judges do not react positively when one spouse has tried to decrease the value of the marital estate by hiding or undervaluing assets. However, one state seems to give to ultra-wealthy their own loophole that at least one billionaire has used to try to keep his spouse from receiving her share of the marital assets.

One billionaire made his fortune in quantitative trading where he helped build a company that is a market leader. He and his wife owned a dozen properties and an extensive artwork collection. However, after he informed his wife of the divorce, she was stunned to find out that the marital estate was only valued at $12 million. This is because he set up trusts in South Dakota and moved nearly all of the couple’s money out of their names.

Unfortunately for the billionaire’s wife, what her husband did was completely legal under South Dakota law. The state tries to attract money by passing laws that are extremely permissive and favorable for the rich who want to shield their money. There is practically nothing that can be done about it given the extreme protection that these trusts receive under South Dakota law. As a result, wealthy people have moved hundreds of billions of dollars to the state in order to take advantage of its favorable laws for instances just like this.

If a spouse is trying to shield assets in a divorce, an individual can bring the matter to the attention of the judge. Courts generally have very negative reactions to this pattern of behavior. A divorce attorney may be able to detect when a spouse is hiding money by scrutinizing the financial documents that they receive when the couple exchanges their financial information. The attorney might check for suspicious transfers or other things that seem amiss.