Finding Hidden Assets in Divorce
You might not be surprised to find out that from time to time, divorcing spouses attempt to hide assets from each other. They undoubtedly think that if they can conceal the asset until the case is over, then it will belong to him/her outright.
A good argument can be made that if the Court never allocates a particular asset, then it retains jurisdiction to do so in the future if / when the asset is later discovered. However, it is always better to identify all assets at the time of the divorce and let the Court address them at that time if at all possible.
Where can you look to try to find these hidden assets? The answer to this question varies from case to case, as every couple's financial situation varies, sometimes slightly and often widely.
Certified Financial Planners and Certified Divorce Financial Analysts, William Donaldson and Adam Westphalen, of The Vista Companies, suggest beginning your search with the following:
- Personal income tax returns are one of the best places to start. Most people are uneasy about misleading the IRS for fear of penalties, fines and even prison. Go back at least 5 years to look for any inconsistencies in income, the presence of trusts, partnerships or real estate holdings.
- If your spouse is a business owner, his/her corporate or partnership tax returns may show a change in salary, charging personal expenses to the company, or excessive retained earnings. Another common trick is to put a "friend" on the payroll, who agrees to give back the money paid to him after the divorce. A forensic tax professional is of tremendous help in this area.
- Checking account statements and cancelled checks for the past few years can also be quite revealing. A cancelled check for a purchase you never knew about, such as an investment property, can make a substantial difference in total assets to be divided.
- Savings account statements may reveal unusual deposits or withdrawals in amount or pattern that could point to a hidden asset such as a dividend producing investment. In addition, cash may be hidden almost anywhere.
- Brokerage account statements are valuable in tracking the purchase and sale of securities. If securities are sold and the proceeds are not accounted for, you can be sure that the assets are out there somewhere.
- Expense accounts can be abused when corporations give employees a great deal of leeway in their expense account reporting. Cross checking between expense account disbursements and savings/checking account deposits may indicate a pattern of abuse if the deposits exceed legitimate business expenditures.
- Children's bank accounts may be opened as a custodial account for the intent of hiding assets as well. In some of these cases, interest is not reported as income on tax returns, and no return is filed for the children.
I live in south carolina i am in the process of divorcing, my wife and her mother have several joint accounts which have been used over the past 17 years for various upgrades to the home purchase of vehicals, are these assets in play in our divorce?