Why is the art and skill of finding hidden income and assets important in a divorce or family law case? Relationship infidelity is a common reason why couples get divorced, but what about financial infidelity? Basically, financial infidelity involves someone’s failure to disclose facts regarding their financial issues to a spouse or partner. This may include spending more than they admit to, keeping credit cards secret, or tucking money away in bank accounts or investments without the other person’s knowledge.
In a recent CreditCards.com poll, 32% of respondents who were married or in serious relationships admitted to this type of cheating on their significant other. It is no wonder that before or during divorce, when the division of marital property is often a contentious subject, one spouse may hide assets or income from the other. Not only is it not fair to the spouse being taken advantage of, it is illegal.
At the Law Offices of John Schmidt & Associates PLLC, we work for the best interests of our clients in Shepherdsville, Louisville, Radcliff, Jeffersontown, Elizabethtown, and Mount Washington, Kentucky. If a divorcing spouse is hiding something, we will bring it to light.
How Are Marital Assets Divided in Kentucky?
Kentucky is an equitable distribution state for marital property division. Assets are not split equally between the spouses but rather, divided fairly between them. The court considers the length of the marriage, the economic contribution of each spouse to assets as well as debts, and how each spouse will support themselves financially after the divorce. The equitable division of assets is determined after they are inventoried and valued.
How Can Someone Hide Income or Assets?
It seems like it would be difficult to hide income or assets from a spouse. However, in most marriages, one spouse handles most of the finances. In other marriages, spouses each handle certain financial issues, sometimes from separate checking accounts rather than a joint one. Now that so many financial activities are done online, a spouse may not even have the opportunity to look at any sort of paper trail.
So, what assets or income might your spouse be hiding from you? What are the keys to finding finding hidden income and assets during your divorce? There are some common ones, such as cash hidden at home, in the office, or in a safety deposit box you don’t know about. Cash payments for such items as goods and services your spouse sells can be mailed to a post office box you’re unaware of or paid electronically to a service such as Venmo or Paypal. A business owned by your spouse often provides cover for a spouse’s hidden income or assets.
Perhaps your spouse received a raise, promotion, or bonus that’s tucked away in a separate bank account. Your spouse could delay commissions or overpay the IRS, intending for those payments to come through after the divorce so you don’t benefit from them. Your spouse could give money or transfer stocks or securities to a close friend or family member and ask them to hold onto it until after the divorce.
Your spouse could buy expensive items, then report them at a much lower value on the asset inventory. Your spouse can even open a custodial account for a minor child and put money into it. This account would not be subject to marital property division; however, the spouse can close it out after the divorce and take the money back.
There are many ways a deceitful person can hide income and assets from a spouse. The good news is that there are also ways to uncover what they are attempting to hide.
How Can I Uncover the Truth About My Spouse’s Hidden Assets?
Finding hidden income and assets during a divorce may take time, and there is a process. The first and most important step you should take if you suspect your spouse is hiding income or assets is to tell your divorce attorney. You should not attempt to uncover these assets on your own because you can find yourself in as much legal trouble as your spouse will be. Your attorney will know where to look and how to look for them legally.
You can, however, look into financial information you have legal access to and make copies for your impending divorce. For example, you can request statements for bank accounts, retirement accounts, and credit cards your share with your spouse. You should also make copies of your joint income tax returns, including all worksheets and schedules, for the past few years. You have as much legal right to that information as your spouse does.
Most of the work of uncovering hidden assets will be done by the divorce discovery process. You and your spouse will each be required to create a comprehensive inventory of all marital assets as well as all separate assets. Separate assets are subject to review but not division. Disclosure of separate property allows the opportunity to review what your spouse claims as separate property and the value claimed. You can then challenge that information if you dispute it.
Your attorney will then develop a list of questions, or “interrogatories,” which will be submitted to your spouse’s attorney to be answered in writing in full and under oath. This is where having an experienced family law attorney works to your advantage. Your attorney will know what questions to ask to uncover discrepancies and get to the truth.
As part of the divorce discovery process, your attorney can also ask verbal questions during a deposition of your spouse. A deposition also involves responding to questions under oath.
Get Trusted Legal Assistance Today
You cannot trust a spouse who is attempting to hide assets from you so you get less than your fair share of them in divorce. That is why you need to work with an attorney you can trust. At the Law Offices of John Schmidt & Associates PLLC, we have proven strategies for finding hidden income and assets and getting to the truth.
Call our office in Shepherdsville, Kentucky, today at (502) 509-1490 or contact us to schedule a consultation about your impending divorce.