Discovering Hidden Assets in a Divorce

In a divorce case, a significant amount of time is spent resolving issues concerning the property rights and financial matters of the parties. Issues involving the distribution of community property, spousal maintenance, and child support all require a comprehensive accounting of the parties’ income and assets.

The significance of these issues may tempt someone to omit or actively conceal property and assets in an attempt to retain some wealth for themselves. However, hiding assets may deprive the other party of potentially thousands of dollars in property and support payments. As a result, you have an interest in uncovering hidden assets in a divorce case.

Ways of Concealing Assets

Hiding assets often involves a level of financial trickery beyond simply burying treasure in the ground. In Texas, all property a person owns is legally presumed to be community property subject to a just and right division upon divorce.

Real estate, personal property, business interests, and financial accounts can qualify as community property. Moreover, the burden of showing that an asset should not be characterized as divisible community property is on the party claiming it as their separate property.

A person can conceal assets in various ways, depending on the nature of the asset or property. Generally, a person can hide an asset by claiming that do not currently own it or by trying to erase records of the asset from existence.

The following are common methods of hiding assets in a divorce case:

• Omitting or denying the existence of assets
• Selling or otherwise transferring assets to third parties
• Claiming to repay false debts
• Creating an undisclosed trust to hold assets

Consequences of Hiding Assets

The parties in a divorce are expected to provide a full disclosure of all their income and wealth so that the court can accurately and comprehensively decide the property and financial issues of the case. Failing to fully disclose one’s assets can expose them to legal sanctions, including adverse judgments regarding property division, spousal maintenance, and child support. A party who hid assets may be ordered to reimburse the other party for the resulting loss of use, including interest.

Tools to Help Discover Assets

Given the stakes involved, parties have a substantial interest in discovering hidden assets. In general, the task of uncovering concealed property in a divorce case starts at the “discovery” phase of litigation.

During discovery, the parties have a chance to find evidence to support their arguments at trial. Methods of conducting discovery include requests for copies of documents, answers to written questions, admissions of facts, and live testimony obtained in depositions.

Documentary evidence is an excellent jumping-off point for an investigation to uncover hidden assets. Major transactions are typically accompanied by written records, such as receipts, invoices, and contracts. Your attorney—accompanied by financial experts such as forensic accountants—can compare a person’s transaction history to their tax records and bank statements to identify money that is unaccounted for. This can indicate income or property that the party didn’t disclose throughout divorce proceedings.

The following documents are often used to find hidden assets in a divorce case:

• Tax returns
• Financial statements
• Loan applications
• Bank account records
• Estate planning documents

For Skilled Legal Representation, Contact Kay Polk, Attorney at Law

A divorce may put a person’s wealth and property at stake. To make sure your property rights and legal interests are protected in a divorce case, it is highly recommended that you seek the counsel of a licensed attorney. Kay Polk, Attorney at Law will tenaciously advocate for you in a divorce case to help make sure you aren’t leaving money on the table.