Hidden Assets During Divorce: What to do

Divorce is complicated, even messy sometimes, and the “messy” part often begins when dividing assets. In Texas, property and money acquired during marriage belong to both spouses. This means that both spouses must identify, classify, and appraise all marital assets and liabilities during the divorce process. But what do you do when you find out your spouse has hidden assets?

What Happens During Divorce

Generally, divorce proceedings begin with filing a petition and the serving of papers to the other spouse. After that, the other spouse is given 20-30 days to file a response, and then the negotiation starts. This is where the couple would attempt to resolve issues like property division through mediation. The keyword here is: attempt, because if an agreement was not reached, it is the judge who will decide for them. After the entire ordeal, a final judgment will be rendered, and the couple’s marital life will come to an end.

To know more about divorce, check out our other blog articles, such as how to navigate the process and custody battles.

Hidden Assets and Effects on Divorce

Hiding assets during divorce proceedings is not just unethical but also illegal. When a person hides their assets during a divorce proceeding, it will be difficult for the court to divide the assets equally. Doing so also makes the divorce harder for both spouses, not just the aggrieved spouse. Hidden assets only complicate and delay the divorce proceeding, which is already mentally, emotionally, and financially taxing on its own.

There are legal repercussions if the court finds out you intentionally hid assets as well. The court may impose penalties or sanctions by awarding a larger share to the honest spouse. Meanwhile, the guilty spouse will lose their credibility and end up getting an unfavorable outcome.

What to do During Suspicion of Hidden Assets

Transparency is the key when it comes to the division of assets. The more honest you are, the easier it will be. The court favors those who are honest. As the court says, “who comes into equity must come with clean hands.”

When Your Spouse is Hiding Assets

As the spouse, regardless of whether you are about to end your marriage, you are the one who knows your spouse better. Therefore, it is mainly you who can tell whether your spouse is acting suspiciously or if they are hiding something. One way to identify is through inconsistencies in their daily lifestyle and their actual financial income. They may seem lavish on social media, and yet it doesn’t match their income. Another tell-tale sign is when they can afford expensive gifts to their spouse (or paramour), yet are unable to pay for monthly dues.

Other tactics that you should also look out for include:

• Property Transfer – the guilty spouse may temporarily transfer ownership to another person, either a family member or friend they trust, until the divorce is finalized.
• Underreporting Income – this one is common among business owners who can manipulate cash flow, delay client payments, or inflate business expenses to make it look like they are earning less.
• Offshore Bank Accounts – this is when they would use international accounts to hide assets that may not easily be traced.
• Cryptocurrencies – while this is a modern way to invest money in, the guilty spouse may take advantage of the anonymous nature of digital currencies to hide wealth.
• Creating Shell Companies – this is a bit more roundabout, but some guilty spouses will go to the extent of establishing fake companies to move and hide money.

When you think something is inconsistent with their financial status and behavior, it is important to inform your lawyer. Your lawyer can help gather financial documents, hire forensic accountants, and utilize the legal discovery process to uncover hidden assets.

It is also equally important to be extra vigilant during this part of the divorce proceeding. One of the main reasons for divorce is irreconcilable differences and breach of trust. The person you married may be completely different from the person you will be divorcing. It is heartbreaking, but you must stay level-headed regardless. Take notice of suspicious transactions or behaviors. If you found something alarming, don’t resort to confrontation immediately; instead, contact your lawyer and inform them.

To help you out in such a difficult time, make sure to hire a competent lawyer who has your interest in mind and will go the extra mile for you. The Edgett Law Firm has the right mind, tools, and emotional intelligence to make sure you get the best outcome. Contact us at 972-424-0760 or go to edgettlawfirm.com/contact/