My Spouse Is Hiding Assets. How Will That Affect My Divorce Settlement?
During divorce proceedings it is important to obtain an accurate valuation of all marital assets and property so that a fair property settlement can be made. Unfortunately, in some divorce cases, particularly those that involve complex or high-stakes marital estates, one of the spouses may believe that the other is hiding assets to shortchange the other spouse in the settlement process.
In fact, it is possible for one spouse to hide assets so well from the other spouse that those assets cannot be found in a traditional manner. In some cases, even using a creative approach, all assets may not be uncovered. That is why it is important to have an attorney that knows how to uncover all feasible options when it comes to hidden assets in a divorce.
Why Would Assets Be Hidden?
While you may think that it’s uncommon for one spouse to hide assets from the other, that’s actually not the case. Spouses may choose to hide assets to keep more of the marital property for themselves while keeping the other spouse from getting the fair settlement they’re entitled to. The practice is common, but it is underhanded and completely illegal.
How Are Assets Hidden?
The most common types of assets that are hidden are cash, mutual funds, bonds, insurance policies with cash value, and stocks. Converting cash into personal property is also a common way to hide assets; this may include guns, paintings, quality carpets, jewelry, antiques, vehicles, or other collectibles, which are often undervalued or even overlooked. The following includes other common ways that spouses hide assets during a divorce:
- Stash money in a safe deposit box, in the house, or somewhere else – Think about your spouse’s recent activities and habits. Has there been anything unusual or anywhere you have spotted them where they typically don’t appear?
- Under report income on tax returns and financial statements – If it isn’t reported, it won’t be used in financial analysis.
- Overpayments to the IRS or creditors – If the spouse overpays, they can get a refund after the divorce is final.
- Create false debt – The spouse may collude with friends or family to establish false debt or expenses. They can make payments to them knowing that they will get the money back after finalizing the divorce.
- Transfer stock – Your spouse may transfer investments or stocks into the names of family members, “dummy” companies, or business partners. After finalizing the divorce, the assets can be transferred back.
How Are Hidden Assets Located?
Before starting the search for hidden assets, an investigator must have all personal identification information for your spouse. Because assets are often transferred to close friends and family, having as much information about them as possible is also helpful. This information includes names and addresses, social security numbers, birthdays, etc.
Certain other information could also help an investigator locate hidden assets. Does your spouse travel? If so, where do they stay and what are their activities when they travel? Does your spouse have funds automatically transferred into an account? Do they have their paycheck deposited into their own account? Where do your spouse’s credit card statements and bank statements get mailed to? Is cash frequently used to pay for purchases? Who is your spouse’s accountant? Do they own a business? This basic information can help the investigator get a head start in finding your assets.
What Can Happen If My Spouse Is Hiding Assets?
Texas is a community property state, meaning that most assets that are acquired during the marriage are considered part of the marital community estate. The court will divide this property between the parties to achieve a result that the court believes is fair. If a judge discovers that fraud has taken place, they will determine the value the estate would have been if the fraud had not been committed.
The new estate is then divided between the spouses in any manner the court deems fair. This usually means that the wronged spouse will get the portion of the estate they would have received had fraud not been involved. The judge may also order a monetary judgement against the fraudulent spouse in favor of the spouse that was wronged.
How an Attorney Can Help
Having an attorney that is experienced in Texas divorce law can help you uncover hidden assets and get the property settlement you deserve. An experienced attorney will know who to hire and how to uncover a variety of types of assets that are often hidden when trying to prevent the other spouse from getting a fair settlement. The attorneys at Lindamood & Robinson, P.C. have the knowledge to get the results you want and deserve. Contact us today for help.