It's usual that spouse try to hide assets in time of divorce

How to Find Hidden Assets During a Divorce

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Some divorces go smoothly. But experienced family law attorneys will tell you it is not unusual for a divorce to get ugly. And one of the things couples fight over most often is assets. This includes cash, houses, buildings, and other assets the couple shares. And some couples fight over assets they don’t share: Sometimes, one spouse will try to hide assets from the other. Attorneys will tell you it takes work to dig up things your spouse is concealing, but it can be done. So here’s what you need to know about how to find hidden assets during a divorce. 

It Is Not Unusual for Divorcing Spouses to Conceal Assets

The first thing to know is that financial “cheating” is common—very common. For example, in a recent survey by the National Endowment for Financial Education (NEFE), 42 percent of respondents admitted to cheating on their partners financially. 

Part of the reason for this is that Texas is a community property state. This means that, with some exceptions, all property acquired during the marriage is owned equally by both spouses. For some spouses, the idea of having to split the assets equally with their future ex is enough to motivate them to act illegally. 

One of the most common reason for hiding assets, spouse want to minimize the child or spousal support
One of the most common reason for hiding assets, spouse want to minimize the child or spousal support

Spouses also may be motivated to hide assets because they want to minimize the amount of child support or spousal support they will have to pay. Others want to hide behavior that has gone on previously—for example, gambling, drug use, or purchases for a mistress. 

And some people try to hide assets for the worst possible reason: Because they think they can get away with it. 

What Are the Most Common Hidden Assets?

A spouse can try to hide almost anything during a divorce. But generally, they will conceal something of value. Here are some likely hidden assets during divorce:

  • Investment accounts and offshore accounts
  • Real estate
  • Inherited monies and trust accounts
  • Credit cards
  • Fine art and jewelry
  • Bonuses

Family law attorney Sean Lynch notes that dishonest spouses will tend to focus on cash and items that do not create an obvious paper trail.

“Cash makes it harder to trace the individual’s activity,” he said. “And once the money is gone, it’s gone. Judges try to split the assets 50/50, but they can only go off the numbers presented to them.”

Signs Your Spouse May Have Hidden Assets

Lynch said that, while every case is different, some warning signs may indicate your spouse is hiding assets. These include:

  • Being secretive or vague about finances, accounts, etc.
  • Maintaining total control over accounts and finances
  • Having a private PO Box or mailbox
  • Erasing computer records or programs
  • Frequent stock sales
  • Unusual purchases, trips, or activity
  • If your spouse has a safe deposit box

Some people will try to deceive the spouse by constantly complaining about a lack of money. And others will complain about having no money while at the same time seeming to live a lavish lifestyle. 

How Do Spouses Hide Assets During a Divorce?

As you might expect, there is no limit to the number of ways a spouse can conceal the couple’s wealth. Some people will do it by opening new accounts in the name of the children. If asked, the partner may make an excuse, saying it is a fund for the children’s future. Or they can transfer stock ownership to an ally, and then transfer it back later. 

People also try to hide assets by doing business with family or friends. For example, your spouse may sell the family boat to his buddy at a bargain deal, with the intention of buying it back later. Or your spouse may give a gift to a family member, again with the intention of reclaiming it after the divorce.

Lynch added that deceitful people sometimes try to create ownership. For example, the house may be in their parents’ name. “Or we might have a situation where the guy’s wife’s brother bought his truck for him and the payments are going to him,” he said, “Or maybe he is storing his RV at a buddy’s place.”

How Can a Business Owner Hide Assets During a Divorce?

Family-owned businesses provide a convenient way to conceal wealth, making it harder to find hidden assets during a divorce. 

“By running everything through the business, a person can greatly lower his or her personal income,” Lynch said. ”This is especially common when it comes to paying child support. If your spouse hides assets in the business, he or she may be able to significantly lower the payment amount.” 

Here are three ways business owners can hide their wealth:

  • Unreported income: Businesses that work in cash can easily conceal their income.
  • Phony payments: The owner may “pay” friends for products and services they did not actually do, artificially reducing the owner’s wealth. 
  • Nonexistent staff: The owner may be “paying” employees who don’t exist, helping hide total assets. This is another way the owner can appear to be “poor.”

Also, both business owners and regular employees may have offshore accounts. 

“Most clients are very upfront,” Lynch said. “They just want to be done with the divorce. The ones you have to keep an eye on are the people who are approaching the case like a battle they have to win. They often try to show themselves only in the best possible light.”

How to Reduce Your Risk of Losing Assets in a Divorce

In a difficult divorce, an experienced family law attorney can be your best ally. However, even the best attorneys need help. One of the best things you can do to help your attorney find hidden assets during a divorce is to become knowledgeable about your finances.

In a complicated divorce, family law attorney can help you to reduce the risk of losing assets
In a complicated divorce, family law attorney can help you to reduce the risk of losing assets

“It’s not unusual for one spouse to handle most of the finances,” Lynch said. “But if you are getting divorced, being financially uninformed is a real handicap. If the other party is hiding something and you are not aware of it, it makes my job much harder. Initially, have to go off what the other party says.”

Lynch believes being financially informed is good advice for everyone, not just divorcing couples.

“Even if divorce is the furthest thing from your mind, it’s wise to be knowledgeable about your financial affairs,” he said.

How to Find Hidden Assets in a Divorce

So what should you do if you suspect your spouse is holding back on you? Lynch said to find hidden assets, you must take action—and the sooner, the better. 

“If you’re suspicious, the first thing is to get more involved in the day-to-day family finances,” he said. 

You also will want to start collecting documents as soon as possible. That includes bank account statements, credit card statements, loan paperwork, retirement account records, and other information about your assets.

One of the best things you can do is get your own copy of your tax returns. And you should keep a discrete eye on your spouse’s credit reports and spending habits, particularly for expensive items. In extreme cases, you may even need to hire a private investigator.  

“If you suspect your spouse is hiding assets from you, act quickly,” Lynch said.

Last, don’t sign any important documents that you do not fully understand.

If You Think Your Spouse is Hiding Assets, Talk with an Attorney

Of course, if you’re worried about the honesty of your spouse, you probably also are worried about the stability of your marriage. If you are considering divorce, Lynch recommends you speak with an experienced divorce attorney as quickly as possible. And as difficult as it may be, you need to tell the lawyer that you may need help finding hidden assets. 

The attorney will be able to provide good legal advice. In some situations, the attorney may even hire a forensic accountant to help track down hidden assets. 

“If your spouse is hiding stuff, there usually is going to be a paper trail,” Lynch said. “For example, all of sudden, it looks like his direct deposit paycheck is a little smaller. Or maybe they took out a second mortgage on the house.” 

Sean Lynch is a Metroplex Attorney Who is Experienced in Discovering Hidden Assets During Divorce Cases

Attorney Sean Lynch is ready to represent your hidden asset divorce case.
Attorney Sean Lynch is ready to represent your hidden asset divorce case.

Are you concerned that your ex might have a hidden bank account or other assets? Talk with the award-winning family law attorney Sean Lynch + Associates, PLLC. He can help you prepare your case and track down the assets that you rightfully deserve a share of.

For a no-cost case review, contact him today or call 817-668-5879.

Be careful before signing any paper in time of separation

How Do I Find The Assets My Spouse Is Hiding From The Divorce Court?

Reading Time: 9 minutes

If you are in the middle of a divorce, you might suspect your spouse of trying to hide assets to avoid sharing them with you. Property division in Texas follows the community property principle. This means that marital property must be shared equally in a divorce.

A recent survey by the National Endowment for Financial Education (NEFE) found that 42% of American couples admitted to cheating on their partners financially. The same institution found that 40% of American couples who manage their finances jointly admit to keeping money secrets from their spouses.

While an experienced family law attorney may be good at finding hidden assets and has legal discovery tools available to them, it can still be challenging to find hidden assets in divorce if you’re not knowledgeable about your finances.

“In a lot of marriages, it’s not unusual for one spouse to handle most of the finances,” Sabelhaus+Lynch attorney Stephanie Sabelhaus says. “And we understand that.”

“But if you are getting divorced, being financially uninformed is a real handicap. If the other party is hiding something and you are not aware of it, there’s just not much we can do. We have to go primarily off what the other party says, which may or may not be true.”

Your lawyer also has to submit more requests and commit more time towards finding hidden assets, which can mean higher attorney expenses.

“Even if divorce is the furthest thing from your mind, it’s wise to be knowledgeable about your financial affairs. While it is typically the wife who is less financially informed, husbands have been known to make this same mistake,” Sabelhaus says.

Why Do Divorcing Spouses Hide Assets?

Ex-spouses may attempt to hide assets from one another during a divorce for several reasons, including the following:

  • They think the law might not share their assets in a manner they would be satisfied with
  • The possibility of surrendering or paying more than what they feel their former spouse deserves
  • They want to conceal certain behavior or conduct from their ex-spouse
  • They want to avoid paying child support or spousal support
  • The divorce is a high-asset case
  • One spouse was solely in charge of the property or assets

What Are The Most Common Hidden Assets?

Divorce or separation can turn ugly fast, and some former spouses may attempt to conceal assets. Some individuals may also sell any assets that can be easily converted to cash, such as bonds and stock shares

Other assets that might be hidden include:

  • Investment accounts
  • Bonuses
  • Real estate
  • Inherited monies
  • Trust accounts
  • Offshore accounts
  • Credit cards
  • Fine art
  • Jewelry

Signs Your Spouse is Hiding Assets

Spouse can hide assets from court for several reasons
Spouse can hide assets from court for several reasons

While you might not expect your partner to prevent you from getting what is legally yours, it’s not uncommon. There are many behaviors people engage in when they are concealing assets.

Here are some signs your spouse might be hiding assets:

Being secretive about money

Your spouse might generally be secretive about money and give vague answers when you ask questions about your finances as a couple. They might keep away tax returns and bank statements, and generally handle bank matters by themselves.

Maintaining total control

Your ex may maintain total control of shared resources and assets, including bank account details and passwords. It is your right to know as much about your family’s financial status as your partner does. You should have access to any joint bank account.

Deleting computer records or programs

Another way that a person may hide assets is by erasing financial records or computer programs like QuickBooks or Pastel. He or she may also claim that a computer has crashed when they have actually destroyed or stolen the hard drive. In some cases, they may regularly hide or dispose of paper statements.

Having a private mailbox

Your ex may own a private mailbox or separate PO Box to receive important financial information secretly. In this case, some spouses may consider using a private investigator to monitor the other person’s activities.

Complaining about money

Your ex may keep complaining about the bad state of their finances, like a major debt, mysterious loss of business, or unsuccessful investments. This may be an attempt to get you to think they don’t have as many assets. Overstating, exaggerating, or lying about one’s financial struggles can also end up skewing the property settlement in the other party’s favor.

Income and lifestyle discrepancies

If your ex lies about his/her earnings but is visibly living a lavish lifestyle, chances are he/she is concealing assets. For instance, if he or she takes expensive vacations or makes ridiculously extravagant purchases, chances are that he or he is lying about his or her financial situation.

Sudden or mysterious account activities

If a shared bank account has previously had a consistent withdrawal rate, but you notice sudden or strange withdrawals and purchases, then something may be amiss. Keep an eye on the transactions passing through any joint bank account.

Asking for your signature

Someone who is trying to hide assets before divorce may keep demanding your signature on various financial documents. To be on the safe side, read financial documents carefully before signing it, or take it to your attorney for professional advice.

Gifting to loved ones and friends

Although giving gifts or large assets to family members or friends may seem like a generous act, it is a huge red flag. A spouse could reclaim the assets after the divorce is finalized.

Opening a new account

If you notice that your spouse is depositing money into a separate bank account from the bank statements, there is a chance that they may be hiding money. For example, your spouse may open another bank account with your child’s name to hide money. When asked, he or she may say they are saving for your child’s future milestones.

Frequent trips or financial activity overseas

If your ex has an offshore bank account or makes regular trips overseas without a good reason, you might need to investigate. Your lawyer may need to send an order to the overseas bank that you think your ex has an account in to get all records in his or her name.

Questionable business and/or tax practices

You might notice that your ex has started giving a salary to an employee you’re unfamiliar with. You might find that your ex exaggerates business expenses on his/her tax returns.

If your spouse has a business, it’s easier for them to hide money. “By running everything through the business, a person can greatly lower his or her personal income,” Sabelhaus says. “This is especially common when it comes to paying child support. The court uses a formula based on the individual’s wealth to determine how much he or she will have to pay each month. If your spouse hides assets in the business, he or she may be able to significantly lower the payment amount.”

If you notice any of these signs, you might need to take further steps to track your finances as a couple and investigate if your spouse is attempting to hide their income or money. In some cases, you might need to hire a private investigator.

Consequences of Hiding Assets During Divorce Proceedings

Hiding assets during a divorce is illegal
Hiding assets during a divorce is illegal

Not only can hiding assets lead to criminal penalties for the spouse involved, but the court may also transfer all of the discovered marital assets to the other spouse.

During divorce proceedings, both spouses are typically required to fill out a financial declaration form. This reveals all assets owned by both parties. Once you sign this form, you’re swearing under oath that what you have declared is correct to the best of your knowledge.

If one spouse doesn’t disclose his or her finances during a divorce, there are usually serious consequences. Once it is found that a spouse is trying to hide income or assets, the judge has several options for penalties to impose. These include:

  • Awarding a smaller share of the assets
  • Paying the legal fees of the other party
  • Criminal charges for perjury or contempt of court, which could lead to time behind bars.

What Should I Do If I Suspect My Spouse Is Hiding Assets?

Undervaluing marital assets, under-reporting income, or overstating expenses are more common than you might imagine.

Here’s what you can do to find hidden bank accounts and assets during a divorce.

How to Find Hidden Bank Accounts and Assets During a Divorce

Understanding the resources and methods used by professionals such as a forensic accountant, private investigator and a divorce attorney can help you avoid getting duped by your spouse or former spouse who is concealing marital property.

Here are a few common ways to find out if your spouse or ex-spouse is hiding assets from you.

Hidden Documents

Although the world is quickly going paperless, many paper documents are issued by the IRS, banks, and mortgage companies. Be mindful about the mail that comes in and find out where your spouse keeps those documents. Have your own copy of tax returns and any addendums.

You could find property titles, credit card statements, and bank statements that your spouse keeps in a certain location. It’s generally fine to look for documents in your own house or safe deposit box. However, hacking into another person’s online account or email account could be an illegal means of gathering evidence.

Credit Reports and Bank Accounts

One way for your ex-spouse to keep hidden assets is to open a secret bank account or credit card. Before the divorce process, he or she may transfer funds to the hidden bank accounts. If any small transfers go unrecognized for a long time, they can definitely add up. That’s why it’s strongly recommended to keep an eye on credit reports, tax returns, and bank statements before and during a divorce.

In addition to making these kinds of transfers to hidden bank accounts, a spouse may also transfer money to a friend or relative. Your spouse may also open new bank accounts in your children’s names and start transferring money to those accounts.

Therefore, one of the best ways to protect yourself and prevent your partner from hiding assets through hidden bank accounts is to keep a close eye on bank statements. If you believe that your spouse is trying to conceal the existence of a hidden bank account, consider working with a forensic accountant or private investigator.

You should also monitor credit reports. They can offer some important clues as to properties or bank accounts that your spouse may be hiding from you. The only thing that credit reports will not show is debit card accounts.

Monitor Spending Habits

Consistently review your spouse's bank statements during the divorce.
Consistently review your spouse’s bank statements during the divorce.

Your spouse may also be buying assets. For instance, your spouse may buy a new car, furniture, or other high-value items like jewelry.

Chances are that they may be buying such things to sell them and make money post-divorce. That is why it’s recommended to keep a close eye on any large purchases. It may be a way for your ex to retain hidden assets.

Seek Professional Help

Dividing assets during a divorce can create issues that have a long-lasting impact on your life. If you are going through a divorce, you need an experienced divorce lawyer on your side to ensure you receive the full amount of assets you are entitled to – and discover hidden assets.

Experts recommend you talk to an attorney if you or your former spouse:

An experienced attorney can conduct an asset search investigation to determine if a spouse has any assets that he/she is not accounting for. A qualified attorney can also handle the legal process to help find hidden bank accounts and get more information about the hidden assets.

For instance, an attorney can provide help and support in the following ways:

  • Request the testimony of a witness under oath
  • Request the court to order an asset search
  • Demand bank statements, loan applications, tax returns, and other documents
  • Request that a spouse answer written questions or “interrogatories”
  • Make search demands, including demanding an asset search investigation in certain properties and electronic records.

You may also want to hire forensic accountants and private investigators to help you discover potential fraud and illegal concealment of marital assets.

Timing is Everything

If you’re contemplating filing for a divorce or are already going through one, it is important to take stock of all marital assets as soon as possible. It’s not uncommon for spouses to hide assets when the divorce process begins.

If you suspect that your spouse has been concealing marital property and tax returns, discuss it with your divorce attorney. This is particularly important if one spouse has been the main breadwinner or has been solely responsible for evaluating bank statements and paying bills during the marriage.

Your divorce lawyer will find the best way to gain a good understanding of your shared assets and resources. That could involve requesting your ex to provide documents and subpoenaing banks and other institutions to provide the necessary information about your marital assets.

If you’re considering filing for divorce, it’s best to start collecting documents as soon as possible. That includes business account records, bank statements, loan paperwork, retirement account records, and other forms of information about your marital assets. This sort of information will come in handy when your divorce attorney starts to work on your case.

In some cases, you might be convinced that there are hidden assets somewhere but it may not be worth the cost. Sabelhaus has experienced this a few times with clients.

“A client might say, ‘I know he has an extra $1,000 or $3,000 hidden somewhere’,” she said. “And I understand how that can be a lot of money for some people. But you have to weigh it against the added legal expense of trying to find that money—and the stress of dragging out the divorce. Instead of focusing on victory at any cost, it makes more sense to focus on being as financially informed as you can now.”

Attorney Sean Lynch is ready to represent your hidden asset divorce case.
Attorney Sean Lynch is ready to represent your hidden asset divorce case.

Are you seeing signs that your ex might have a hidden bank account or assets somewhere? Not sure about the options available to you to find hidden funds when your marriage is ending?

Let the award-winning Family Law experts at Sabelhaus and Lynch law firm help you prepare your legal case. We have years of experience in family law and most importantly are ready to listen to you.

Contact us today for a no-cost case review.