In the property division stage of a divorce, a couple may realize they don’t have the full picture of shared assets and debts in their marriage. This stage typically requires uncovering and processing a substantial amount of financial information. Many couples work together to compile this voluminous information together, but divorce does not always bring out the best in people. Many spouses take intentional steps to conceal income and possessions from their soon to be ex, especially if the relationship has soured.
If you suspect your spouse isn’t being completely transparent in this area, you may need to do some extra digging for an honest valuation and division of property to be possible. Many different circumstances can warrant a closer look at a spouse’s assets to get to the truth.
In a divorce, both partners need to be forthcoming about:
- Tangible assets – money, art, jewelry, property, and items that could be sold or liquidated; and
- Intangible assets – bank accounts, brokerage accounts, investment income, stock options, and alternative forms of payment like royalties.
Not everyone is upfront about their financial standing during divorce proceedings, despite their legal obligation to do so. As a result, you might find yourself feeling disadvantaged in your divorce process. Financial deprivation can come in many forms in a marriage. There are many things that a person can do to become more aware of household finances. Education about finances can and should occur well before a divorce is even on the horizon. If a spouse is hesitant to share finances when the relationship is in a healthy place, it can lead to even more concealment during a divorce.
You Are the “Out Spouse”
Often times, there can be an imbalance in financial knowledge. One spouse may have taken on the role of handling the day to day finances and is therefore more aware of the assets. If you haven’t tracked savings or debts in your marriage, you may have less access to important information than your spouse does. As the “out spouse,” you may end up relying on your ex to produce records during the information gathering process in a divorce.
Becoming more informed often requires accessing records from entities such as:
- Banks;
- Mortgage companies;
- Lenders;
- Money managers;
- Retirement plan administrators; and
- Other third parties.
Ex Shows Signs of Hiding Assets
Sometimes a spouse has concrete reasons to suspect the other of concealing assets in the marriage. An attorney or other experienced professional can help you obtain and examine the documentation necessary for you to have a fuller picture of your marital assets. At the very least, you’ll know you’re asking the right questions. Red flags that signal someone may be hiding something include:
- A history of controlling or secretive behavior regarding the family’s finances;
- Expensive purchases made without the other’s knowledge – especially if there is a clear attempt to hide them;
- Substantial withdrawals from a joint account or changes to the account without your knowledge;
- Repeated cash withdrawals out of a joint account; and
- Changed passwords that prevent you from accessing financial accounts without your consent.
Payments to Family/Friends
A spouse may attempt to move assets by “paying back family or friends” for money leant to your family during the marriage. Without evidence documenting money from third parties as a loan with a designated payment plan, a Court can view this as a gift that does not have to be paid back. When a spouse requests to use marital funds to pay back a “loan” to a third party, it is important to review all documentation regarding the loan before agreeing to release any funds.
Tax Returns Don’t Add Up
Earnings that can’t be accounted for are a common sign that someone isn’t showing the full picture. This can occur when one spouse is a business owner, but business ownership makes evaluating your financial situation all the more complicated. To find out if cash has been diverted to an unknown location, you’ll need to compare your household’s expenditures against business income filed on tax returns. If there appears to be a significant discrepancy between the two, your ex may be intentionally hiding some of those funds from you.
Getting answers may require the assistance of an investigator or attorney with experience tracking down hidden assets. But you can start by doing your own initial research and letting your lawyer know of any suspicious findings.
Do you need assistance investigating or evaluating assets in your divorce? The highly-rated lawyers at Davis Friedman are highly experienced at marital and non-marital property division and asset valuation. We can help you track down hidden assets so you achieve the best result possible. Contact us at 312-782-2220 for a consultation.
