Common Ways Spouses Hide Hidden Assets
Divorce is a very personal process, and there are many things couples need to discuss and agree upon during this time.
The level of discussion and agreement needed increases when there is property or children involved or when a couple is unable to divide things amicably. Divorce proceedings can sometimes take months, if not a year or more, to come to full agreement on both sides and, ultimately, completion.
A divorce can become exceedingly more complicated when one or both parties do not cooperate or are unfair to each other. One of these complications is when a spouse tries to hide assets from being calculated.
Divorce and Assets
During a divorce, one of the main points of disagreement is in regards to the dividing of assets. Assets, to almost oversimplify the term, are simply things that a person owns that are worth money.
These things can be something like a piece of land or a home, a vehicle such as an automobile or even a bicycle, furniture, technology, bonds, investments, airline miles, or just cold, hard cash. When it comes to calculating a person’s assets, debts are also taken into consideration. The idea during a divorce is that a total amount of worth needs to be calculated so it can then be divided fairly.
Dividing Assets In Texas
Most states, including the state of Texas, are community property states. This means that “all property and debt acquired during the marriage is owned by both parties. This means the initial starting point in the division is 50/50.”
If one or both parties of the divorce are hiding assets, then figuring out the total amount to be divided becomes an issue. This is a mindset and, ultimately, a scheme some spouses try to justify because they are angry with or feel betrayed by the other person. They do not think it’s fair that half of the marital assets will be awarded to the other person, regardless of what the law says.
How Assets Are Hidden
There are a few common ways spouses can try and hide assets during a divorce:
Hiding cash. This is exactly what it sounds like. A spouse figures out a way to withdraw money without the other person knowing and stashes it for personal use after the divorce. Some tactics include opening a hidden bank account or simply hiding cash off-site where the other person would never find it.
Buying new property or items and hiding it. During a divorce, someone might buy property and hide it in a place like a secret storage unit or even their personal office. Property has cash value to it, so a piece of new artwork, for example, can be worth thousands of dollars that might not make its way into a divorce division of assets if it’s hidden. There are even cases of spouses being entire new plots of land or property without the other person knowing.
Paying off a loan for a family member or friend. The tactic here is that a person says they are paying off a loan or some other debt, but in actuality, their friend or family member is just holding onto the money. After the divorce, that loan magically disappears and all the money is returned.
Underreporting or not reporting cash income. For people in the service, hospitality, or other cash-heavy industry, a sneaky way of hiding cash is not reporting tips. The person simply pockets all their cash earnings instead of reporting or sharing them.
Asking an employer to delay a bonus or promotion. Cash bonuses and even things like stock options are all subject to division during a divorce. The strategy here is that a bonus is held until after a divorce is finalized, meaning just the one person benefits.
Delaying invoices attached to a family business. During a divorce, family businesses or individually owned businesses are all subject to discussion, with one person oftentimes gaining full ownership. In this situation, the person who will be awarded the business actually holds off on accepting payments on larger invoices with clients until after the divorce. This directly affects the cash flow and worth of the business’s assets, which are included in a divorce calculation.
Creating a new bank account for a child. While it’s unfortunate, children are often hidden behind during a messy divorce situation. This situation involves a spouse actually creating a bank account in the name of a child, for that child, but after the divorce, all that money is taken out and used by the adult in question. They never had any intention of allowing the child to benefit from it.
Divorce is already a complicated and difficult situation without adding something like your spouse hiding assets. In any divorce case, hiring a divorce lawyer to support the process is critical. They will be a guide and a mentor during this time in your life to ensure you get what you are entitled to at the end of a divorce.
Dedicated & Compassionate Family Law Attorneys
At Setzer Law Firm, we’re here to help families in Southlake, Texas, no matter what family law matter you’re dealing with. Our team of attorneys is standing by to give you clear guidance and expert legal support every step of the way.
With over thirty years of combined, Texas-specific experience, we have represented clients dealing with divorce, child custody, child support, and other areas of family law. We know that divorce is a difficult situation and that this is a difficult time for all members affected, so you can trust we will help you navigate this part of your life as stress-free as possible.
Please contact us today or fill out our online form to receive more information and learn how Setzer Law Firm can support you and your family during this time.