Each party to a divorce is under a legal obligation to disclose all assets that they own, since any property acquired during the marriage is considered marital in nature and subject to equitable distribution. However, some spouses attempt to get a better financial settlement by attempting to hide assets prior to the divorce proceeding. If you suspect that your spouse is failing to disclose all of their property, you have remedies available to find missing assets.
There are multiple creative ways in which a spouse can try to hide assets before or during a divorce. These include:
- Making a fraudulent transfer to a third party, such as a sibling or close friend
- Converting liquid assets into items like art or jewelry and then undervaluing them when reporting them in the divorce case
- Parking money in a revocable trust or fictitious business
- Funneling money through an operating business, which may include paying income to a fake employee or overpaying taxes with the goal of receiving a refund later year
An experienced divorce attorney can employ several methods to uncover hidden assets, beginning with the process known as discovery. This refers to the formal exchange of information between the spouses during the case. Discovery requests made by each spouse’s attorney aim to identify every asset in which the other spouse has any beneficial interest, whether these assets are held personally, through entities like businesses or trusts or by third parties. Every question and request is designed to obtain full disclosure of all property that could be subject to equitable distribution.
Despite the broad requests made in discovery, some parties will fail to disclose some of their financial interests. Your attorneys will ask you to review your spouse’s responses to discovery and to determine if anything seems missing. If you know or suspect there may be assets not disclosed, you can give descriptions that will enable your attorney to make specific requests of your spouse.
Your attorney also will analyze the discovery responses for anything that looks suspicious. For example, if there is a large withdrawal from a bank account the attorneys will look for where the money went. Was it transferred to another bank account? Was it used to purchase an asset, and if so, has the asset been disclosed and reasonably valued? Your attorney may also check public records for any indication of undisclosed assets.
If there remain any suspicions about hidden assets, your attorney may advise hiring a forensic accountant or other professional investigator. At this point you will have to make a cost-benefit analysis. Investigative services can be expensive but may be worthwhile if you believe there are valuable assets that might be recovered.
Dawson Family Law, PLCC in Sterling Heights has wide experience in divorce cases involving spouses who attempt to hide assets. Call me at 833-671-4445 or contact me online to set up a free consultation.
