Divorce can be a nasty ordeal. Both sides are expected to play nice and act like adults, but when dividing the marital assets and deciding who gets custody of the children, some people seem to think all the rules go out the window.
In Texas, assets acquired during a marriage are generally community property belonging to both spouses. Assets acquired before or after a marriage are generally considered separate property. In Texas divorces, courts divide community property in a "just and right" manner, which is not necessarily equal. Unfortunately, a surprising number of spouses try to hide assets from their spouse and the court to keep it from being divided and shared with their soon-to-be ex.
British accounting firm Grant Thornton estimated that one in five divorces has a spouse trying to hide assets. In 88 percent of those cases it is the husband being sneaky. More than sneaky, hiding assets is unethical and illegal. If caught, the court may order them to forfeit the hidden asset(s) and pay some of their spouse's legal fees. More importantly, they lose credibility with the court.
Common Hidden Assets During Divorce
Sneaky spouses have been known to hide assets in the following places:
- Secret retirement accounts
- Joint bank accounts with a young child
- Safety deposit boxes
- Overpayment to the IRS or other creditors (credit cards)
- Phony debts "owed" to family or friends
- Cash stored as traveler's checks
- Bearer bonds or Series EE savings bonds
- Delayed work bonuses or stock options
- "Gifts" (like cars and jewelry) to be returned once the divorce is finalized
- Antiques and collectibles, possibly kept at the office
If done well, a spouse can hide away tens or even hundreds of thousands of dollars in assets during a divorce settlement. Half of whatever is successfully hidden is then off the table in the "just and right" division of community property, basically stealing property from the other spouse (and possibly their children).
There are several different ways to find hidden assets: income tax returns, business records, loan applications and government records to name a few. If you believe your soon-to-be ex-spouse is hiding assets, contact an experienced divorce attorney to analyze your situation and ensure you are receiving your "just and right" share of the assets that rightly belong to you.