As a community property state, Texas divides all of the marital property equally, leaving separate property (owned before the marriage) to the individual owners. All property is considered to be marital or joint property unless proven otherwise.
One consideration of the property division, especially for financial assets, is the difference between the two earning capacities of the spouses. If both spouses earn fairly equally, a somewhat equal split is likely. But if one spouse earns substantially less than the other, it’s possible that the court could order a larger share to the lesser-earning spouse, especially if he or she has custody (conservatorship) of the child or children. This decision is in addition to a soon-to-come order for child support, separate from the divorce decree.
Many spouses and partners in common-law marriages become concerned when faced with the possibility of a substantial payout to the other person. They may attempt to minimize the potential for a large financial deficit and find ways to hide assets from both their spouse and the court. Unfortunately, that’s not really a good idea.
Handing Over All Financial Information
Of course, when pursuing a divorce, both parties are required to provide a sworn inventory and appraisement of all:
- Bank accounts and statements
- Other financial accounts (brokerage accounts, etc.)
- Statements from PayPal, Venmo, GooglePay, Square, Stripe, Payoneer and other similar mobile payment services
- Liabilities (such as credit card debt)
- Paycheck stubs/statements
- Health saving account (HSA) information
- Stocks, bonds and other investments
- Tax returns
- Other related documentation as requested
Although asset hiding is more difficult than before, it’s still possible that a spouse will attempt to hide assets, including money. But our tech-driven world means that it’s much more difficult since nearly everything is traceable with a digital signature. A request for production will require the other party to produce all financial documentation.
Concealing True Worth
Hiding assets can get you in a fair amount of trouble with the court, especially if you “get away with it” at first. A judge will not be kind to a person who attempts to defraud their spouse and lie to the court. But over the years, many individuals have come up with more interesting ways to hide money and/or assets in a divorce.
If you believe your spouse is hiding assets but aren’t sure how, here are some things to look for:
- Reduction in income. A sudden decrease in income could be an indicator that some income is being diverted elsewhere such as a secret bank account, or a bank account of a friend, new partner, or relative. Setting up a new online bank account is simple, and paycheck statements or stubs will have this information available.
- Sending mail to another address. Diverted personal mail sent to a workplace office, a post office box, or anywhere else other than the family home is an indicator of an additional bank or financial account that someone doesn’t want their spouse to know about.
- Overseas bank accounts. While this isn’t a common tactic, it’s not as secure as it used to be. The US and many other countries share information in the fight against terrorism. A foreign account is easy to open, but it’s still not the “safe haven” many think it is. Even if the overseas account is discovered, recovering money may be very difficult.
- Transfer ownership of property to another. Similar to diverting mail, property not in his or her name won’t be a part of the divorce proceeding.
- Hiding assets in a college education fund. A 529 plan is intended to save for a child or children’s education, and can be added to estate plans. But unwary spouses may not realize that the other person has the freedom to withdraw that money at any time with penalty, and can access it after the divorce is final.
- Over-paying income taxes for a larger refund after the divorce. It’s not unheard of for someone to go to their HR department and ask to have more money removed from their paycheck in order to increase a tax-return refund later, once a divorce is final. It’s a long-game, and may not be noticed immediately. This deprives the other party of the funds they may be entitled to.
- Cryptocurrency, such as Bitcoin. Anonymity is one of the features, and easy to hide.
Spouses who refuse to supply financial information are likely hiding something, somewhere. At that point, your Fort Worth divorce attorney can file a request for discovery for that information. If you don’t, the court will assume you waived your rights to a share of that money.
When You Find Assets After The Divorce Is Final
A forensic accountant can not only locate hidden assets as well as determine a couple’s actual income during the divorce.This is especially helpful when one party is self-employed and may tend to misrepresent his or her actual income in order to reduce potential spousal and child support payments.
If you discover that your spouse hid money for the purpose of keeping it from you, act quickly or you may lose your opportunity to get it.
Texas Family Code Sections 9.201 and 9.203 allow you to recover these assets, but the statute of limitations is two years to file an action. After that, your attorney can file a lawsuit post-divorce to find and divide the undisclosed assets.
Fort Worth’s Compassionate Divorce Attorney
Wendy L. Hart is an experienced family law attorney helping people throughout Tarrant County who need help in a divorce. As a divorcee herself, Wendy understands the process as well as the difficulties involved. We represent both for men and women. We’ll make sure you’re treated fairly, and will protect your interests and your children.