Finding and Reporting Hidden Assets

 Posted on July 24, 2019 in High Asset Divorce

One of the factors that sets high asset divorces apart from many other divorces is the practice of hiding assets. Fortunately, there are steps that divorcing parties can take to discover and report attempts by their spouses to hide assets. However, taking these steps usually requires the assistance of professionals, including a forensic accountant and a high asset divorce attorney, both of whom can help track down assets and thereby ensure that any settlement agreements entered into by the parties account for all of the couple’s property.

Utilizing the Discovery Process

Couples who litigate their divorces are required to provide each other with copies of important documentation and to submit to questioning. By requesting the production of documents and issuing interrogatories, a high asset divorce lawyer can help get to the bottom of a couple’s financial situation, as parties who refuse to produce documentation as ordered, or who lie while under oath, face strict penalties.

Following Paper Trails

Divorcing spouses attempt to hide assets in a number of different ways, including:

• Arranging for sham transactions between friends and relatives who retain possession of an asset until the parties’ divorce is finalized, at which point, they return the property
• Selling assets without the other spouse’s knowledge and retaining the funds
• Transferring funds to another bank account without the other spouse’s knowledge
• Fortunately, there is almost always a paper trail for these types of unlawful transactions, making it especially important for divorcing couples to retain an experienced forensic accountant who can identify and follow these trails and uncover any hidden assets.

Reviewing Income Tax Returns

Tax returns can be an extremely helpful source of information when it comes to finding hidden assets, as they can provide proof of earned income, as well as any sales of jointly owned marital property. Of particular importance, is the fact that federal tax returns also group sources of income into different categories, including income from rentals, stocks, dividends, as well as any other investments, making it easier to identify property that has not been accounted for. It’s also important to remember that it is possible for a spouse to hide assets by overpaying federal and state taxes and then receiving a credit via a tax refund after the divorce is finalized.

Analyzing Business Records

Many couples who are involved in high asset divorces are business owners. Unfortunately, these entities can be used to hide assets by disguising marital property as a business expense, which is often achieved by:

• Making false payments to third parties who are in on the plot to hide assets; or
• Asking third parties to invest a significant amount of capital into purchasing business assets that are sold following the finalization of the business owner’s divorce.
• Again, forensic accountants and high asset divorce attorneys are adept at looking through business records to find these types of assets.

Contact Our High Asset Divorce Legal Team

Please call Powers Kerr & Rashidi, PLLC at 512-610-6199 today to begin working on your own divorce case with an experienced Austin high asset divorce lawyer.

Sources:

https://www.forbes.com/sites/catherineschnaubelt/2019/03/08/finding-hidden-assets-in-a-divorce/#6a55f7c86fd1

https://www.huffpost.com/entry/uncovering-hidden-assets_b_5680350