Hidden Assets in Divorce Cases

Signs of Hidden Assets in Divorces

There are several indicators that your spouse may be attempting to conceal assets during a divorce. For instance, your spouse may hire one or more financial advisors before or after filing for divorce. While this may be a regular practice, it is essential to scrutinize the services provided and transactions undertaken by the financial planners to determine if any marital property was transferred. Additionally, if your spouse owns a business, it would be wise to request documentation of all business assets, payroll, bank, and tax records to assess if the business is being used to distribute assets. An unexpected rise in business expenditures may suggest an effort to mask income as expenses. Your spouse may also sell or transfer assets to relatives or friends to regain them after the divorce is finalized. Lastly, your spouse may move assets to offshore accounts as they are harder to track and may not be easily accessible through the discovery process.

Uncovering Hidden Assets During Divorce Cases

If you suspect that your spouse is concealing assets during your divorce proceedings or when you're planning to file for divorce, it's crucial to collect as much evidence as possible. The discovery process plays a crucial role in this, enabling your lawyer to gain information about any assets accumulated during the marriage and assess whether your spouse is attempting to hide any property. Your attorney can use interrogatories, requests for production of documents, and requests for admissions to obtain information about your spouse's bank accounts, tax returns, retirement accounts, and any overseas accounts. If your case is complicated, a forensic accountant may be hired to investigate whether your spouse is hiding assets and to verify the validity of any transfers or transactions. It's essential that your attorney acts promptly to ensure that discovery requests are answered completely and that no assets are left undisclosed.

Another vital tool in determining whether all assets have been accounted for is the inventory and appraisal of all marital assets and debts. In Texas, your spouse will be required to prepare and file an inventory and appraisal and swear under oath as to its accuracy. Comparing all financial documentation and records received from your spouse with the inventory and appraisal can be helpful in verifying that all marital property has been disclosed.

Uncovering Hidden Assets After Divorce

In Texas, if assets that were concealed during a divorce are uncovered after the divorce has been finalized, the Texas Family Code provides a unique post-divorce remedy in the form of a suit to divide undivided property. To file this type of suit, the assets in question must have existed while the divorce was ongoing. In determining whether to divide assets after a divorce is final, a court will consider whether the spouse intentionally and fraudulently hid assets, or if it was an innocent mistake. If the property was not disclosed through discovery or the inventory and appraisal, it is likely that it was intentionally hidden. Additionally, it's crucial that the divorce decree contained language allowing for the division of undisclosed assets. Your lawyer should request the court to prohibit any language that automatically awards assets in a party's name to that party, as this would prevent you from pursuing a suit to recover hidden assets that surface after the divorce is final.