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Hidden Assets

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Hidden Assets

The division of property between spouses can be one of the more contentious issues in a divorce. Often, one spouse may attempt to hide assets from the other spouse in an effort to exit the marriage with separate property that belongs to the other spouse or marital property that they otherwise may have to divide in the divorce.

When spouses maintain hidden assets, it can complicate and prolong the divorce litigation by forcing the parties to conduct timely and costly discovery.

This article discusses the issue of hidden assets in a divorce and the resources that are available in the discovery process to help uncover hidden assets.

What Is Separate Property?

Separate property is the property that each spouse owns before they enter the marriage. So, if spouse #1 owned a car before the marriage, the car remains the separate property of spouse #1 when the parties divorce (unless spouse #1 transfers ownership to spouse #2 during the marriage by adding their name to the title).

Likewise, if spouse #2 owned a business prior to the marriage and operated the business during the marriage, the business would remain spouse #2’s separate property upon divorce.

Generally, each party gets to keep his or her separate property upon divorce. So, upon their divorce, spouse #1 would retain the car, and spouse #2 would retain the business. The only property that gets divided in divorce is the parties’ marital property.

What Is Marital Property?

Marital property is any property, including income and debts, that either party acquires or earns during the marriage. So, if spouse #1 purchased a car during the marriage, or if spouse #2 started a business during the marriage, the car and the business would be marital property unless the spouses agreed otherwise. 

Upon divorce, the court will equitably divide all marital property between the spouses. So, if the assets are marital property, upon their divorce, depending on the value of the assets, spouse #1 might retain the car, spouse #2 might retain the business, or the total value of the assets would be divided equitably between the parties.

How Does a Spouse Hide Property?

If a spouse wanted to deprive the other spouse of marital property that otherwise would be divided upon divorce, the spouse would attempt to remove a particular asset from what is considered marital property so that it is not divided.

To do this, a spouse might place an asset in someone else’s possession and claim that the asset is no longer part of the marital property they own. When one spouse owns and operates a business, the spouse might run income or assets through the business to pay a business debt or appear to derive less income from the business. 

A spouse also might place property in trust to remove the asset from the total marital assets. Another method of “hiding” assets is to undervalue an asset. A spouse also might simply claim that a marital asset was acquired prior to the marriage and, therefore, was really separate property that should not be divided. 

How Can I Prove My Spouse Is Hiding Assets?

Suppose you suspect your spouse is hiding assets during the divorce to avoid having to share the value of the property. In that case, your divorce attorney may be able to uncover the hidden assets through a process called “discovery.”  

What Is Discovery?

Discovery is a process in divorce whereby each party discloses to the other party any information, documents, or evidence that is relevant to the issues in the divorce. Each party is required to make a full and fair disclosure of all of the assets they possess at the time of the divorce. 

If you suspect your spouse has not made a full and fair disclosure of assets, the court can order your spouse to turn over any records or documents that might reveal what property they own. 

This might include:

  • Tax returns;
  • Income statements;
  • Bank statements;
  • Business financial records;
  • Pension and retirement statements;
  • Investment account records; and
  • Any loan documents

There are specific discovery tools that your divorce attorney can request to determine if your spouse owns or possesses any assets that they are not disclosing, including: 

  • A request for the production of documents, for which the court will order your spouse to turn over any records or documents, like tax returns and bank statements, that may reveal hidden assets. 
  • A request for admission which is a series of written statements that your spouse must either admit or deny. For example: “Admit that you are currently in possession of the [specific asset] that you purchased on your honeymoon.”
  • A request for answers to interrogatories, which are written questions that your spouse must answer under oath. Interrogatories may uncover new information or may be used to rebut subsequent contradictory statements.

Finally, discovery allows each party to take the other party’s deposition, during which, while under oath, the spouse orally answers questions posed by the other spouse. 

What Happens If My Spouse Is Hiding Assets?

Hiding assets can affect the actual division of marital property upon the divorce. Suppose a spouse is determined to be hiding assets. In that case, the court may exercise its discretion to award the other spouse a greater share of the marital property when dividing assets between the parties. 

The court also may require your spouse to pay your attorneys’ fees that you incurred to uncover the hidden assets in discovery.

Finally, if the court determines that your spouse violated a court order to disclose assets, your spouse may be held in contempt of court. This could result in fines or even time in jail.

Should I Hire a Divorce Lawyer If I Suspect My Spouse Has Hidden Assets?

If you suspect your spouse is hiding assets during your divorce, you should contact an experienced divorce attorney to discuss your case. Uncovering hidden assets can be difficult. You need a divorce lawyer with experience in the discovery process who knows the right questions to ask to reveal assets that you may be entitled to in your divorce.

Contact the Orlando Divorce Law Firm of Conti Moore Law Divorce Lawyers, PLLC for Help Today

For more information, contact our experienced Orlando divorce lawyers at Conti Moore Law Divorce Lawyers, PLLC by calling (407) 831-0203 to schedule a free consultation. We serve all through Glenn County and it’s surrounding areas.

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