Hidden Assets in Divorce: Techniques Used by Divorce Attorneys to Ensure Full Disclosure

The divorce process can be both emotionally and financially taxing. As you work to chart a path forward from your marriage, the equitable distribution of assets is critical to your future well-being. Unfortunately, at times, there is a lack of financial transparency. One partner may purposely take steps to conceal assets or even waste or destroy marital property.

If you suspect your spouse has hidden assets, seeking qualified legal counsel as soon as possible is in your best interests. Financial deception in divorce is a serious matter. There are practical steps you and your divorce attorney can take to protect your financial interests, identify the other party’s assets, and pursue a just divorce settlement.

Below, we will discuss various methods for determining whether your spouse has hidden assets. We will then consider how a divorce lawyer can address financial deception and guide you toward a fair resolution — thus safeguarding your financial future.

Financial Deception in Divorce Proceedings

Financial deception in divorce occurs when one spouse intentionally hides or misrepresents the value of assets. This is done to gain an unfair advantage in allocating marital property.

Identifying hidden assets is not always straightforward. When one mate knowingly works to deceive the other, he or she may go to significant lengths to conceal the real state of one’s finances.

What’s more, financial deception may take various and sometimes surprising forms. Understanding the tactics and schemes a deceptive partner may use is the first step in protecting yourself financially during a divorce.

Common Methods for Hiding Assets in a Divorce

Some of the most common forms of financial deception involve concealing money and misrepresenting the value of assets. Oftentimes, one party does this in hopes of reducing the amount of child support or spousal support he or she will be required to pay in the divorce agreement.

Divorce attorneys frequently see individuals attempt to conceal assets in these and other ways:

• Delaying receipt of income: A person may ask an employer to delay bonuses, commissions, or contracts until after the divorce is final.

• Underreporting income: If a person owns a business or is self-employed, he or she may underreport income or overstate expenses to make the business appear less profitable.

• Hiring phantom employees: When a spouse owns a business, he or she may add fictitious employees to the payroll. After the divorce, he or she could then reclaim the money paid to these non-existent employees.

• Secret bank accounts or credit cards: A partner may open accounts under his or her name only and then use these accounts to hide funds or make undisclosed purchases. A person’s credit card statements can reveal much about his or her financial circumstances.

• Overpaying debts: A spouse may intentionally overpay debts to create a false financial burden. This will appear to reduce the overall value of marital assets. Additionally, by overpaying taxes or loans, a person may create a situation where he or she is eligible for a tax credit or refund that can be claimed after the divorce.

• Creating false debts: One spouse may conspire with business partners or friends to create fictitious loans or debts. Once the divorce is over, he or she gets the money back.

• Purchasing tangible assets: At times, a person may sink money into physical assets, such as art, jewelry, or collectible items, when entering divorce proceedings. It is not uncommon for courts to overlook or undervalue such items. These items are then promptly sold once the divorce is final.

• Using offshore accounts: A spouse may transfer money to a bank account in a foreign country, making the transactions difficult to trace.

• Hiding valuable items: One spouse may attempt to hide valuable items such as jewelry, artwork, or other heirlooms to exclude them from the property division in the divorce. He or she may stash things around the home or open a safe deposit box of which the other spouse is unaware.

• Investing in cryptocurrencies: The digital and somewhat anonymous nature of cryptocurrency makes it an increasingly appealing option for hiding money or assets.

• Establishing trusts or shell companies: Hiding assets in trusts or shell corporations often makes it harder to associate them directly with an individual.

• Manipulating property valuations: One partner could collude with appraisers or real estate professionals to either undervalue or overvalue marital property to hide his or her net worth.

• Transferring money to friends or family members: An individual may gift or loan a significant amount of money to friends or relatives with the understanding that he or she will get the funds back after the divorce.

Hiding assets or otherwise intentionally misrepresenting your financial standing during a divorce is unethical. Such actions can have considerable legal consequences.

It is inadvisable to face this kind of serious situation on your own. A well-practiced divorce lawyer can assist you in discovering the truth and uncovering any financial deception on the part of your spouse.

Uncovering Hidden Assets During Divorce

If you suspect that your spouse is hiding assets, you may need professional assistance to prove this is the case. Full financial disclosure on the part of both spouses is necessary for the fair and equitable division of property, alimony, and child support.

An experienced divorce attorney can help you expose hidden assets by:

• Examining financial documents: Tax returns, bank statements, and other financial documents may reveal discrepancies or inconsistencies that indicate undisclosed assets.

• Using forensic accounting: Forensic accountants investigate and analyze financial records. Such financial professionals can trace funds and asset movements, looking for anomalies or suspicious activity. Attorneys may work with forensic accountants to uncover financial deception in divorce cases.

• Following digital trails: A person’s digital history may reveal hidden assets. Text messages, emails, and social media activity could divulge financial transactions or communications about an individual’s undisclosed funds or hidden income. Further, online banking and investment accounts leave digital trails that may be traced to concealed assets.

• Conducting a lifestyle analysis: A lifestyle analysis involves comparing a mate’s known income and expenses with his or her current lifestyle. A notable disparity between a person’s income and way of life may indicate hidden money or assets. For instance, if a spouse professes to have a limited income but maintains a lavish lifestyle, there may be an undisclosed source of funds.

If you can prove that your spouse engaged in financial deception after you began your divorce proceedings or during the time that your marriage was ending, the court may impose financial or other penalties in your favor.

Further Steps a Divorce Attorney Can Take to Establish Financial Deception

Finding hidden assets during a divorce can involve a complicated discovery process. A knowledgeable divorce attorney, though, will take prompt action once financial deception is suspected. Your lawyer will be able to use his or her legal know-how and resources to protect your financial interests.

In addition to the actions previously mentioned, a divorce lawyer may do the following to ensure full disclosure of marital assets:

• Research public records: Your divorce attorney can research property records, business records, corporate filings, and other public documents to identify marital assets that a spouse might not have disclosed. 

• • File a motion to compel: Your lawyer can file a motion to compel the deceptive spouse to disclose all relevant financial information. This legal process requires both parties to provide full and accurate disclosure of assets, income, and debts.
  • Use court subpoenas: The court can issue subpoenas to financial institutions or businesses for relevant documents regarding your spouse’s bank records, retirement accounts, or other financial information. Further, you can subpoena your spouse’s employer to provide payment records and history, such as pay stubs and tax documents.
  • Send interrogatories: Your attorney may send written questions to the other party. Your spouse is required by law to answer them truthfully. These questions may encompass such things as sources of income, property that your mate owns or controls, or assets that are co-owned with other parties.
  • Conduct depositions: Your divorce attorney can conduct a deposition hearing, asking your spouse questions about financial matters and potential hidden assets while under oath. A court reporter will transcribe the entire conversation. The answers given may be submitted as evidence in court.

• Seek court intervention: Once other avenues to uncover hidden assets are exhausted, if your mate remains uncooperative and deceptive, your lawyer may seek court intervention. Judges have the authority to impose monetary sanctions, issue orders to produce financial documents, and take other measures to ensure full disclosure of marital assets.

Such steps often play an important role in the divorce process. Detecting and addressing financial deception is critical to achieving a fair and equitable division of the marital estate. A knowledgeable divorce attorney is the advocate you need as you gather information, obtain records, and perform discovery requests.

Reach Out to Experienced Utah Family Law Attorneys for Support

The decision to end a marriage can be extremely painful. If your spouse is intentionally hiding financial assets, the entire experience can be that much more stressful. So this is no time to go it alone. You need and deserve the guidance and support of an empathetic, understanding family law attorney.

The compassionate divorce lawyers at Brown Family Law are adept at helping Utah families move forward successfully from difficult divorces. Our legal team understands the tactics used to hide assets. We leave no stone unturned to uncover any form of financial deception.

Our law firm has established a proven process for navigating challenging divorces. We are a dedicated and focused team, determined to provide the very highest quality of service to each and every client. We endeavor to help divorcing couples dealing with difficult financial discoveries to achieve a favorable legal outcome. At the same time, we strive to ease the emotional burden of divorce.

We want you to secure your family’s financial standing. Please don’t be afraid to ask for the help you need today.

Call 801-685-9999 or use our online contact form to schedule a consultation. With Brown Family Law on your side, you and your children can look to the future with hope and confidence.