High Asset Divorce Fraud

 Posted on December 15, 2015 in High Asset Divorce

In many respects, a stick of dynamite and a high-asset divorce have a great deal in common. Prior to the inevitable explosion, there is a burning fuse. Sometimes the fuse is very short; for example, there may have been an extramarital affair or an outburst of physical violence. Other times, the fuse is considerably longer, as differences simmer and eventually escalate into conflict. This process often takes place over the course of years or even decades.

Especially in the latter scenario, some level of fraud, or attempted fraud, is nearly inevitable. Since a spouse anticipates a high net worth divorce, there is ample opportunity to conceal assets. Fortunately, there are affirmative steps that an attorney can take to mitigate or erase the damage.

Preventative

To continue the above analogy, there are a number of telltale property fraud indicators to look for as the fuse burns down, including:

• Unexplained changes in income or expenses;
• Financial statements that are redirected to another location or discontinued altogether; and
• Correspondence from unknown corporate entities.

If there is evidence of fraud, a temporary restraining order (TRO) may be an option. A TRO prohibits a certain action until the judge has an opportunity to rule on the merits. To obtain a TRO, an applicant must generally show a likelihood of success on the merits. In practical terms, all of the traditional elements of a fraud case – a false representation of a material fact that the actor either knew to be false or made with reckless disregard for the truth – must be present.

Rehabilitative

In 2011, House Bill 908 went into effect. This measure allows the judge to "reconstitute" the marital estate to include the missing property. Assume that Wife increases the withholding on her paycheck to keep funds out of the marital estate. During litigation, the judge may add the missing funds back into the marital estate, and require Wife to either accept a money judgement or an offset in another area.

The bill is meaningless if the fraud is not uncovered. During discovery, a diligent attorney can ask the right questions, and analyze the answers, to locate missing assets.

To fairly divide property in a divorce, all assets must be accounted for. If you are facing a marriage dissolution action, contact an aggressive Round Rock  divorce lawyer in  for a confidential consultation. Convenient payment plans are available.

Sources:

http://www.statutes.legis.state.tx.us/Docs/FA/htm/FA.7.htm

https://legiscan.com/TX/bill/HB908/2011