Spouses disclose their assets, debts, income, and other financial information during divorce. This ensures that their attorneys have all the necessary information to negotiate a fair division of marital property, or it provides the court with the information to equitably distribute property. When a spouse hides assets, this can severely impact the division of property. A Topeka divorce attorney is an essential ally if you suspect your spouse of hiding assets.
Divorces are complex and very financially straining for both parties. Spouses may hide separate or marital assets due to financial concerns, to spite their spouse, or to keep certain assets to themselves. These actions can financially harm the other spouse and violate their rights. When spouses hide assets during court-ordered discovery, they can face civil and criminal consequences.
How Can a Spouse Hide Assets?
Spouses hiding assets happens more frequently in high-asset divorces, such as if one or both spouses own a business, have high incomes, or otherwise have significant wealth. A spouse may actively be hiding assets during the divorce proceedings. A spouse may often hide assets if there is significant time between a couple deciding to get a divorce and filing the papers to do so. Some ways that a spouse may try to hide assets include:
- Storing assets with friends or family members as gifts or debts that can be returned to the spouse after divorce
- Avoiding the finalization of beneficial business deals
- Delaying raises or bonuses from their job
- Putting assets into retirement accounts that they do not disclose to their spouse
- Failing to disclose cash payments from their job
- Giving loan repayments to straw purchasers or fake third parties
- Withdrawing cash from marital accounts to place into personal accounts or assets
- Wasting marital funds on expensive assets that are then undervalued
- Hiding assets in a business or undervaluing a business
- Creating a secret trust, offshore account, or account in a child’s name
- Overpaying the IRS to receive a higher tax return
If your spouse is being secretive or unusual with their finances during a divorce, it is important that you have an attorney present to protect your rights. An attorney can help you navigate divorce discovery.
What Are the Tools in Divorce Discovery?
The process of discovery in divorce can be either formal and court-ordered or informal. When you suspect that your spouse is hiding assets, it’s important to secure court-ordered discovery. You can request formal discovery in uncontested divorces, and formal discovery is always a part of contested divorces.
The discovery process is how each spouse’s attorney can receive and request financial and property documentation. There are several potential tools available in a discovery that your attorney can effectively use to uncover hidden assets. These include:
- Interrogatories: This is typically the first step in the discovery process. Interrogatories are a set of written questions that each party asks of the other that are answered under oath. These questions should relate to finances and legal necessities for the case.
- Requests for Production: Requests for production typically occur after interrogatories, as a spouse and their attorney can request the specific documentation learned from the written questions. The request must be reasonable and made in good faith, and it may include requests for titles, deeds, account statements, written communications, and other essential financial information.
- Depositions: Depositions are statements under oath. The attorney of a spouse will ask the other spouse questions about documentation, specific assets and debts, and other relevant financial information. These may be in-person interviews or done over video conference. There is typically a court reporter present. Because these statements are on record and under oath, discrepancies can result in contempt of court.
- Subpoenas: A subpoena may be required if the requested documentation is held by a third party or if a spouse fails to provide the information required. Third parties could include banks, schools, hospitals, or other financial institutions.
FAQs
Q: What Happens If a Spouse Is Hiding Money During a Divorce?
A: If a spouse is hiding money during a divorce, the courts will take it very seriously. During the court-ordered discovery process, spouses are required to share all financial documentation and information with each other. Failure to do this can result in both civil and criminal penalties. A spouse may be charged with contempt of court and face fines and jail time. The court may require that the spouse who hid assets pay the legal and court costs of the other spouse and/or award all hidden assets or more marital assets to the other spouse.
If spouses fail to disclose assets in an informal discovery process, there may not be direct penalties, but attorneys in the case or the family court may determine that it is fair to award more assets to the other spouse.
Q: Can I Sue My Husband for Hiding Money From Me?
A: If spouses are still together, it is not inherently illegal for one spouse to hide assets from the other. However, if a couple is getting divorced or planning to get a divorce, it is illegal. Spouses must share financial information with each other during the formal discovery process in divorce. If either spouse conceals separate or marital assets during this process, they can be charged with contempt of court and suffer civil and criminal consequences.
Q: How Do You Uncover Hidden Assets?
A: To uncover hidden assets, contact your attorney. There are several potential options if you suspect your spouse of hiding assets during divorce. These include:
- Analyzing the financial documents and information that you have legal access to. Strange withdrawals, purchases, gifts, or other information not adding up may point to hidden assets.
- Use the formal discovery process. If you do not have legal access to your spouse’s financial information, there are legal methods that the court can use to obtain that information. This process includes document requests, interrogatories, and other tools.
- Work with professionals like attorneys and forensic accountants.
Q: What Is a Sign That a Spouse Is Hiding Assets?
A: There are several potential signs that a spouse is hiding assets prior to or during divorce. These include strange financial activities such as:
- Temporarily paying unheard-of loans or gifts to third parties, including friends or family members
- Placing assets into a secret offshore bank account or retirement account
- Wasting marital assets on expensive purchases
- Unexplained cash withdrawals from marital accounts
- Overpaying the IRS
If you do not have access to your spouse’s finances, you may need to work with an attorney to uncover potentially hidden assets.
Protect Your Financial Interests
At Stange Law Firm, we have significant experience with high-net-worth and high-asset divorces, and our firm has the resources to handle investigations into potentially hidden assets. Contact our team today.
