A recent survey suggests hidden assets in marriage—and divorce—are more common than many suspect.
A marriage is as much a financial relationship as it is an emotional one, so when a marriage falls apart both spouses will have to divide between them most of the property they have acquired during their marriage. Texas is a community property state, meaning that most marital property is deemed to belong to both spouses. However, because of hidden assets, many people going through a divorce are unaware of what property is up for division. Below is a look at how common hidden assets are and where to find them.
Financial deception is common
People who have spent years in a marriage may assume that they know exactly what their spouse owns and what financial decisions he or she has been making. However, for many people that is simply not the case. As CNBC notes, one study has found the one-fifth of Americans say they have made a major purchase or $500 or more without telling their spouse or live-in partner. Furthermore, about 7.2 million Americans say they have a bank account or credit card that they keep hidden from their current spouse or partner.
With so much financial duplicity going on in many marriages, it should come as no surprise that in many cases that dishonesty carries over into the divorce process. Hiding assets during divorce is a form of fraud since it deprives the other spouse of knowing how large the marital estate is and thus inhibits his or her ability to negotiate a fair share of that estate. However, despite it being illegal, hidden assets continue to plague many divorce cases.
Where assets are hidden
There are countless methods for concealing assets, from the relatively basic to the more sophisticated. If one spouse owns a small business, then there are an especially large number of ways that that business can be used to conceal assets. The spouse, for example, could begin accepting more cash jobs without reporting them to the IRS, suppressing their income, or making their business expenses appear larger than they are.
As Forbes points out, a duplicitous spouse can also use friends or family members as a way of helping them conceal assets. For example, they could create a fake debt with a family member, paying that relative for the “debt” while being fully aware that he or she will get all the money back after the divorce is finalized. A similar tactic is to transfer stock into a friend or family member’s name during the divorce and then transfer it back into their own name after the divorce.
Getting legal help
Uncovering hidden assets is not easy and for those who suspect that a former spouse may be concealing assets it is important to talk to a family law attorney immediately. An experienced attorney can help clients deal with suspected hidden assets in a number of ways, such as by helping get subpoenas forcing the other spouse to produce relevant financial documents and bringing in a forensic accountant to help uncover assets.