When couples are ending their marriage, it’s not uncommon for trust between the two spouses to be at a low point. When the couple in question has significant financial assets to be shared in the property settlement, trust can sink even further, and spouses might step outside the boundaries of the law to protect assets they believe should be theirs. What does the other spouse do when they suspect money and property is being stashed? How do you find hidden assets in a divorce?
Finding hidden assets in a divorce requires a detailed examination of financial records and familiarity with the ways people–particularly financially savvy people–might try to keep assets hidden.
As with many problems, the first step can be to know the warning signs.
A big red flag can be when a spouse opens a Post Office box in their own name. Now, perhaps this might be innocent and they’re simply preparing for the next phase of their life after the divorce. A less benign interpretation of this action is that they are now getting mail they don’t want you to see.
It could be the opening of new investment accounts that are exclusively in their name, with the intention of slowly siphoning funds from your joint accounts. It could be the establishment of a trust in someone else’s name. It could be moving money into overseas accounts. All of these require mail, and your spouse quite clearly will not want you to see that mail.
Does your spouse suddenly seem to owe money to their brother or a trusted friend? This could be a way of paying this so-called “debt” out of your joint account, but with the promise that it will be returned after the divorce is final. Your spouse might also try overpaying legitimate debts to actual organizations (e.g., credit card companies), knowing that the refund will come back after the divorce is finalized.
Do you find your spouse taking a greater interest in making lavish purchases? During your marriage, it was like pulling teeth to get them to go with you to an art museum. Now, they want to buy three expensive pieces of art. Maybe the motivation is to resell them after the divorce.
Perhaps the biggest red flag is when your spouse takes control of your accounts, from checking to savings to investments. It could be as simple as the spouse changing the password and not sharing it with you. With unmonitored access to all the money, they are in a position to execute gambits like the ones described above and a lot more.
The process of finding the hidden assets begins with a thorough examination and analysis of all tax returns, bank accounts and other financial statements. The key is to look for areas where there may be discrepancies. If their withdrawal from a joint account that can’t be corroborated with a deposit in another or a receipt for purchase.
If your spouse owns a business, a thorough forensic analysis will include a review of invoices. Is your spouse attempting to effectively stagger the invoices, by telling customers not to worry about paying until after the divorce is finalized? This a tactic aimed at devaluing the business. To devalue an asset is the same as hiding it.
Your attorney’s investigation can include a thorough search for any accounts set up with the Social Security numbers of close friends or even your children. This tactic is how a spouse with some financial know-how might set up a trust and shift money in there. Your own examination might have found the withdrawals from your joint accounts. Now it’s time to go one step further and find out where the money actually went, and in whose name.
The work of piecing together the evidence of hiding assets is a complex one and may require the work of a forensic analyst that your lawyer should be able to connect you with. You still have an important role to play in the investigation though, from giving the analyst the warning signs you’ve seen and clueing them into the level of financial sophistication your soon-to-be ex possesses.
Hiding assets is a serious offense. The document called preliminary declaration of disclosure that is exchanged by the divorce lawyers in the discovery proceedings is an official document in court. It is to be a complete listing of all income and assets, along with expenses and debts.
Providing deliberately inaccurate information is contempt of court. If any testimony in support of the preliminary declaration was given under oath, your spouse has also opened themselves up to charges of perjury. Whether it’s contempt of court or perjury, your spouse could be looking at fines and even jail time.
That’s to say nothing of the effects the revealed deceit could have on the rest of the settlement. A California judge may well take the hidden asset and award it entirely to the innocent spouse. The spouse who attempted to hide it when from getting half to getting nothing. And if your settlement includes discussions of child custody? It’s a fair bet that a judge will be less than sympathetic to the cause of someone just caught with their hand in the proverbial cookie jar.
California is a community property state, and you have the right to share the marital assets. Any effort at deceit must be rooted out and that work is done with good legal representation that understands how complex estates are structured and where to look for telltale signs of financial mischief. Gille Kaye Law Group, PC has a team of highly qualified attorneys, skilled in family law and with a track record of success working on high-asset divorces.
Call us today at (626) 340-0955 or contact us online and set up an initial consultation.