When you get a divorce, you and your spouse will be required to disclose all of your assets and debts. This process helps to ensure that both spouses walk away from the marriage with an equal share of marital property. Failing to honestly and fully disclose your assets is unlawful. Unfortunately, this doesn’t stop some people from being less than truthful during the financial disclosure process.
Do you suspect that your spouse has hidden or fraudulently concealed assets in your divorce? Your concerns may not be without cause. Spouses in a contested divorce can sometimes go out of their way to make the process more difficult than it needs to be. This is often true in high net worth situations. Hiding or shielding assets is one way to attempt to control the divorce. Fortunately, there are certain steps you can take to investigate your concerns.
Which Assets Are Typically Hidden or Forgotten?
Some assets are easier to hide than others. It’s also easier for a spouse to simply forget that they have these assets. These include:
- Insurance policies (and cash value)
- Traveler’s checks, and
- Municipal bonds.
A spouse may also try to hide personal or real property, including jewelry, collectibles, art, and boats.
How Can a Person Hide Assets in a Divorce?
There are many different ways to hide or conceal assets in a divorce. A spouse can work alone or enlist the help of third parties.
Converting Cash: If your spouse knows that a divorce is coming, they may try to take cash and convert it into property that you may overlook. For example, they may dip into a savings account and purchase a valuable baseball card or gun collection. They’d hope that you’d simply overlook or undervalue this new asset in the divorce. Alternatively, your spouse may take cash and purchase bonds or traveler’s checks that are (a) difficult to trace and (b) easy to conceal.
Paying Phony Debts: In some situations, a spouse may pay off non-existent debts to friends or family members. This essentially allows the friend or family member to hold the cahs as if it’s their own. After the divorce, the spouse can turn around and get the money right back.
Using a Business to Conceal Assets: Does your spouse own or operate a business? If so, they could potentially use that business to conceal their own personal assets. A business owner could funnel personal funds into the business or redirect business funds that should have been income. For example, your spouse could set up a fake employee and direct business income to cover that fake employee’s salary. Once the divorce is finalized, that money can be rerouted to your spouse without your knowledge.
Using A Child’s Financial Account: Many families have financial accounts set up for the benefit of their children. If you don’t keep a close on these accounts, your spouse may be able to transfer and conceal funds during a divorce.
How Can I Discover Concealed Assets?
There are many different ways to discover concealed or forgotten assets during your divorce.
Review Financial Accounts: This is the best place to begin your search for hidden assets. Review your financial accounts (e.g., checking, savings, retirement) for unusual or large transfers. These can indicate that your spouse may be trying to convert cash without your knowledge.
Rely on the Discovery Process: Discovery gives you (and your spouse) the right to ask for information, documents, and anything else that may be relevant to your case. Your ability to search private information that would typically be off limits is much greater during the discovery phase. During discovery, you may be able to uncover contracts, records, or other documents that lead you in the right direction.
Ask for a Court Order: Your spouse has a legal obligation to fully disclose their property. If you have reason to believe your spouse is hiding assets, you can ask a court to intervene. A court can issue an order that requires your spouse to present specific information or documents that you’ve requested. Violating a court order can have serious consequences, so your spouse should be inclined to comply.
Work With a Private Investigator: A private investigator can be an invaluable resource in a contested divorce. Your attorney can work closely with the investigator to uncover information that has been carefully hidden or concealed.
Hire a Forensic Accountant: Financial documents and contracts can be complex and difficult to understand. Your spouse may have attempted to make it as difficult as possible to trace finances and assets. A forensic accountant can review these documents, draw conclusions, and help get to the bottom of your suspicions.
Identifying and finding a spouse’s assets can be one of the most challenging aspects of the divorce process. This is certainly true if you try to investigate your suspicions by yourself. Hiring an attorney with relationships with experts and access to certain resources can make things a lot easier. Contact Berenji & Associates to schedule a free consultation. Our Los Angeles family law attorneys are here to help you fight for what you deserve in your divorce.