Many spouses invest in precious metals. This type of investment may not be as exciting as cryptocurrencies or as fast-paced as stocks, but they do offer a relative degree of stability. After all, precious metals have real, tangible value. Even if the stock market collapsed and people were using wheelbarrows filled with money to buy loaves of bread, precious metals would retain their value.
What happens to a precious metals investment during a divorce? Is it true that spouses can conceal assets by transferring funds into precious metals? We all know that selling investments at the wrong time can be costly. So what happens when spouses are forced to liquidate their precious metals at inopportune times? Let’s explore some of the most important considerations when dealing with this type of investment in a divorce.
Can a Spouse Really Conceal Assets Using Precious Metals?
The short answer is yes, it is theoretically possible for a spouse to conceal their assets using precious metals. However, such strategies rarely work out. In fact, these strategies have a high probability of backfiring. Many spouses do not expect to get divorced, and they may act irrationally when they try to conceal their assets. One famous example involved a Colorado man who converted his life savings into gold before dumping all of the bars into a dumpster. He simply did not want his wife to receive any money, even if it meant throwing away all of his own money, as well.
Unless a spouse has taken the necessary steps years before the divorce, it is quite difficult to conceal assets with precious metals. Skilled financial experts can usually get to the bottom of things with relative ease, tracing bank statements and purchases. As soon as the spouse purchases the precious metals, a transaction record is created. These records can be discovered and traced. If the spouse is guilty of concealing assets, they face serious legal consequences.
What if a Spouse Has No Intention of Hiding the Precious Metals?
If the spouse is willing to play by the rules and divide the precious metals, there are other considerations that must be taken into account. Both spouses probably agree that it is best to sell the precious metals at the best time. This means waiting until the value of these precious metals is high, but spouses may not have a great degree of control over when these assets are sold when they are subject to a court order. This is why it is very important to take into account the official date of the divorce as laid out by the court, because this is when the assets will be liquidated.
A Better Option
A better option is to divide the precious metals without selling them. For example, if a spouse has 14 gold bars, they would be divided equally between both spouses. This ensures that the investment is not liquidated at an inopportune time. This may be a relief to many spouses who recognize that precious metals are supposed to be a “disaster fund” for when everything goes wrong. Liquidating the assets during a divorce essentially defeats the purpose of this.