One of the most contentious aspects of a divorce can be the splitting of assets. The fear of financial loss during a divorce sometimes leads to a spouse taking drastic measures in an effort to “win” the divorce. Some unscrupulous spouses will stop at nothing when it comes to manipulating bank accounts, checkbooks, ledgers, and other indicators of actual net worth.
If you’ve been married to someone who has a history of playing loose with the rules then pay attention to these areas where spouses can hide assets during a divorce:
- Giving the assets to a trusted friend or family member. This is among the most blatant ways that money or assets can be concealed. Watch for falsified financial transactions such as: a mysterious loan that must be “repaid” to a cousin; random loans to a friend or family member that becomes suddenly uncollectable; random high-ticket purchases from friends or relatives; or random expensive items that accidentally “disappear” under weird circumstances with no insurance claim made.
- Overpaying creditors. Watch for overpayments to creditors or other entities where the payments create a credit balance that can be cashed in at some point after the divorce. One area that is often exploited is overpayment to the IRS, creating a tax credit that can be used in the future. Payments like this do not show up in the checking or savings accounts and are often not inventoried for division during the divorce.
- Deferring or delaying a raise or promotion at work. Pay attention to signs that your spouse might be deferring actual bonus money or accumulating raises, stock options, or other employment benefits. In many instances these deferments would create divisible community assets! Also: if your spouse owns a small business there are many opportunities to “relocate” assets that should be divisible. A financial expert is often required for making an audit of closely-held businesses to determine if there are assets that really belong to the community.
- Buying equipment for hobbies. During your marriage, you probably each had your own hobbies and interests. Pay attention to the actual amounts spent in support of these activities – there could be hidden assets to be awarded in the divorce settlement.
- Changing mailing addresses on bank and financial statements. If you notice that the bank isn’t mailing the monthly statements like it used to, it is possible your spouse is attempting to conceal the withdrawal of money from certain accounts.
It can be pretty surprising the lengths spouses will go to in order to conceal assets. The good thing is that there are ways of finding out if your spouse has resorted to shady or illegal practices. In a contested divorce, formal discovery can be utilized to dig up records and find assets. In some cases a good forensic accountant might be needed to find the money trail. Make sure you discuss this with your attorney during the early stages of your divorce! Texas divorce law provides for equitable distribution of marital property. This means that all marital property, if divided by a judge in court, will be divided based on what that judge deems is a “just and right” division of property. If your spouse has hidden assets in an attempt to offset that just and right division then you might be able to persuade the court to award you a higher percentage of the marital property!
Bonus tip: If you have any reasons to suspect that your spouse has hidden assets that will magically reappear after the divorce, make sure your attorney addresses this in the final decree of divorce. It is possible to include language that awards such assets to the innocent spouse!
For an experienced family law legal team that will be on your side throughout your divorce, please get in contact with Von Dohlen Law Firm today.