When a marriage ends, the law requires the marital assets to be divided among the spouses during the ensuing divorce process. Sometimes, one spouse will try and hide assets in anticipation of a divorce so that he/she walks away with more than a fair share of the assets. A Murfreesboro divorce attorney at Bennett, Michael & Hornsby offers some warning signs that your spouse may be hiding assets and explains what you can do about it.
Warning Signs that Your Spouse May Be Hiding Assets
Most marriages do not fall apart over night. Instead, it often takes months, even years, to decide that divorce is the only solution. When divorce appears inevitable, a spouse may start thinking strategically about the financial outcome of the divorce. That, in turn, can lead to an attempt to hide marital assets so they are not subject to the division of assets that occurs during a divorce. Common signs that your spouse may be trying to hide assets include:
- Controlling the finances. This refers to a spouse suddenly exerting control over finances when he/she previously had no interest in doing so.
- Mail from unfamiliar financial institutions. Bank statements, credit card statements, and statements from investment accounts that are unfamiliar to you could indicate an attempt to hide assets.
- Lending or gifting money to family/friends. This is a common way to shift money or assets out of joint accounts. Under the guise of “lending” or outright gifting money to a family member or close friend a spouse can build up a decent stash that is waiting for him/her at the end of the divorce.
- Making expensive purchases. Making expensive purchases that were not joint decisions and/or that are out of character could be an attempt to convert joint funds into valuable assets that can be hidden until after the divorce.
- Opening a P.O. box. Unless your spouse has always had a P.O. box, opening one up should be a red flag. He/she may be diverting statements, titles, and other financial information to that address.
- Depositing less income into joint accounts. Most couples have a system for income that is shared. That usually involves depositing some or all income into a joint account. If your spouse is depositing noticeably less income, that could mean the balance is being hidden so it can be used post-divorce.
Uncovering Hidden Assets in a Divorce
The good news is that even if your spouse is trying to hide assets, you have several legal tools that can help you find those assets in a divorce. As part of the divorce process both parties must submit a financial statement. If your spouse lies on that statement, it could ultimately affect the division of assets — in your favor. First, however, you must prove that he/she lied. The “discovery” process can help with uncovering the truth.
During discovery, you can use legal tools such as interrogatories, requests for production of documents, and depositions to help you find hidden assets. Interrogatories are essentially written questions your attorney sends to your spouse that he/she must answer. You also have the right to ask for documents to be produced that are relevant to the divorce. Finally, a deposition involves your attorney asking your spouse questions, in person, in front of a court reporter. Your spouse answers these questions under oath, as if he/she were testifying in court.
If your divorce involves high dollar and/or complex assets you may need to hire a forensic accountant to help you uncover hidden assets. A forensic accountant is specially trained to go through complicated financial documents, legal records, and other “paper trails” with the proverbial fine-toothed comb to determine where money came from and where it went. If hidden assets are located, the court can bring them into the divorce and make them part of the division of assets.
Contact a Murfreesboro Divorce Attorney