The Challenges Involved When Spouses Hide Assets in a Divorce
Most divorces revolve around money. Your financial situation and your spouse’s financial situation affect your future. The stronger your financial situation is, the better you can support yourself and your children. The better your financial situation, the more likely you are to keep your marital home, your business, your retirement benefits, and have more money in the bank.
Your asset, income, and debt situation (and your spouse’s) drives your property division award. The more funds your spouse has, the more he/she should pay for spousal maintenance and child support. Your financial situation and that of your spouse can also affect the child custody/child conservator order.
In many cases, it's relatively straightforward to discover what assets your spouse has and what his/her income is - especially if they earn a regular paycheck from their employer. Spouses who run their own business and have interests outside of Texas or America may be able to hide their assets. Spouses with dishonest relatives may also be used to hide assets.
Generally, once you reach a settlement with your spouse or there is a court order as to property division, child support, and spousal support – the harder it is to change those orders if you discover assets your spouse had after the divorce becomes final.What Methods Do Spouses Use to Hide Assets?
Some known ways spouses try to hide their wealth include:
- Moving assets to other countries or other assets
- Transferring their assets to their business
- Transferring their assets to family members such as parents or siblings
- Creating trusts and then placing assets in the trust
- Selling assets and then creating accounts to hide those assets
Your spouse may give cash or assets to a relative (who they trust not to volunteer where the assets are) while the divorce is pending – and then ask the relative for the cash/assets when the divorce is over. This means your lawyer must either question the relatives and seek to review their accounts or the lawyer must review any recent withdrawals from your spouse's accounts. Some spouses may transfer their assets to someone they're having a relationship with or may even buy that person jewelry or other items. Even when spouses admit to a transfer, they may hide the transfer's true value by selling their interest at below fair market value.
If assets are transferred overseas, even if you discover the transfer, it may be difficult for the Texas family court to order a return of the hidden assets. Though, the judge may hold your spouse accountable for the value of the transferred assets by ordering the spouse to reimburse you for their value.What Types of Assets are Likely to Be Hidden
Generally, assets that can be more easily traced, such as bank accounts, real estate holdings, and vehicles that must be registered, are less likely to be hidden unless hidden overseas or in another state. Assets that may be hard to trace include:
- Negotiable instruments
- Gold and silver
If a spouse transfers assets to a business, it can be difficult to trace which assets belong to the business and which assets belong to your spouse – especially if the business is owned by people other than your spouse. Reversely, a spouse may take money out of business and hide it to show the company has less value than it should. Your spouse, if they own a business, may hire family members or friends. They may then pay them a nice salary even though they don't do any work.
Often buying assets reduces their value because assets such as vehicles lose value the moment you possess them.
Other ways your spouse may try to hide assets or reduce the value of their assets include:
- Spouses may create fake debts and then use their assets to pay off those fake debts
- Spouses may delay taking bonuses or raises until the divorce is ended
- Many spouses, especially if they own their own business, try to argue that their business isn't doing well. They may argue that the business's value is barely enough to feed themselves even though it has a long history of producing a good income.
Family judges expect honest and fair play from spouses. If your husband hides assets, the court may:
- Hold your spouse in contempt until the assets are disclosed
- Award legal fees for your lawyer’s time and effort to disclose the assets
- Award you part or all of the hidden assets
- Award you other non-hidden assets
- Award you a larger share of the marital property
- Increase the amount of spousal maintenance or child support due to the increased value of your spouse’s assets
Our family lawyers work aggressively to discover all your spouse’s assets. This work may include hiring an investigator. It often includes seeking detailed financial records including tax returns and financial records. Sometimes, your spouse’s expensive lifestyle may be a clue that your spouse is hiding assets. When necessary, we work with financial professionals such as forensic accountants and appraisers to review your spouse’s asset and income situation.Speak with a Seasoned Texas Divorce Lawyer Who is Willing to Investigate Your Spouses’ Efforts to Hide Assets
Sadly, some spouses aren’t honest. Your spouse may try to hide their assets in a variety of ways. You should know that at Lyttle Law Firm, we have seen most of the tricks and methods spouses try to hide assets. We work aggressively to find these assets or to show your spouse purposely reduced their value. We demand spouses who hide assets be held accountable in the form of penalties, legal fees, and in higher property division, spousal maintenance, and support awards.
Our Austin and San Marcos family lawyers have the experience and resources, such as working relationships with financial experts to help spouses obtain what they justly deserve. To speak with a strong family law attorney, call us at 512.215.5225 or use our online form to make an appointment. Our lawyers represent residents of Travis, Hays, Comal, Williamson, Bell, Caldwell, Burnett, Llano, and Guadalupe Counties.