Separating from a spouse isn’t always the battle many perceive it to be. Unfortunately, it can become contentious when one party is dishonest about their assets. In some cases, it’s simply because one spouse handles the household’s finances and has all the knowledge of their financial information, while the other spouse does not. But sometimes, a divorcing spouse will hide assets in order to keep them from being divided or transferred.
Article written by Jessica H. Ressler. All rights reserved
When two parties engage in a divorce proceeding, the first step is to exchange financial information. This comes in the form of a Statement of Net Worth that lists each person’s assets, liabilities, income and other financial details. It includes, but is not limited to, the following:
- tax returns credit card debt
- student loans
- monthly expenses
- mortgage information
- business investments
- real property
- retirement accounts
- bank accounts, etc.
All of this information gives a complete picture of what exactly the parties are dealing with in order to fairly and legally divide it amongst them. Not everything is divisible, however; inheritance, gifts and properties obtained before marriage are subject to different rules. Joint accounts and pension accounts are also determined differently, and all of these should be discussed with an attorney to ensure they are properly handled.
When one party uses this financial disclosure as a reason to lie about their finances or hide assets, it compromises the process. Even if one side does not have ownership right’s over the other’s assets, they still need to be accounted for in order for the court to consider all values. This is how the court determines how to divide all of the couple’s properties, assets and debts; as such, transparency is important.
It’s important that if you are the spouse that does not have access to the financial details of your household, you should first ask your spouse for copies of all financial records. Because most accounts are online and even have smartphone apps, accessing those account records should be fairly easy. The same goes for mortgage companies, life insurance companies, retirement plan administrators, credit card companies, etc. Upon receipt of the account records, you can comb through them to ensure that everything that comes in and goes out of your household each month is accounted for so that the Statement of Net Worth is as accurate as possible. Often times, divorcing couples will forget the minutia of the everyday routine and not realize that small charges like Netflix, Hulu, Disney+ and monthly subscriptions like gym memberships, Amazon Prime charges and supermarket deliveries all count, too.
If however, you suspect that your spouse won’t voluntarily disclose their financial information, or that they are hiding or will hide assets, you need to reach out to an experienced attorney that will assist you in investigating their assets and doing a thorough search to ensure everything is accounted for. An experienced attorney can help you demand that your spouse produce certain documents related to their assets. Subpoenas, Requests and Demands for Production of Documents are some of the tools that attorneys use to acquire the information requested; and what is produced by your spouse or their attorney is called their “discovery.” Among some discovery demands are doing an inspection of items like a valuable collection or a safe-deposit box; and deposition requests, wherein your attorney may compel your spouse to orally answer certain questions. Failure to comply with an attorney’s discovery demands is punishable by the court. As such, a demand from an attorney will sometimes motivate an uncooperative spouse to provide the required information.
It is important that once the process of divorce has commenced and the parties are exchanging financial information, that you pay close attention to the small details. Make note of your accounts and search for something unfamiliar: keep an eye out for large deposits or withdrawals; new accounts about which you had no knowledge; large credit card purchases; tax debts or liens about which you had no knowledge; wire transfers or unfamiliar third party names you don’t recognize; missing cash; etc. Anything out of the ordinary may or may not be significant and as such, you should make note of it to discuss with your attorney.
Gathering financial information for a divorce should not have to be difficult but unfortunately, some parties can make it a lot worse than it has to be. If you suspect that your spouse will not be cooperative and is or will hide assets or information, reach out to Ressler & Associates to speak with an experienced attorney that can help you move forward.