How People Hide Assets During Divorce

Divorce is a challenging time, both emotionally and financially. One of the most significant issues people run into during a divorce is dividing up their assets. Unfortunately, it’s not uncommon for spouses to hide assets to prevent sharing them fairly during the divorce. This practice is dishonest and unlawful.

Our divorce lawyers in the Woodlands, Texas will fight hard to protect your interests and stop your spouse from cheating you out of assets. Contact Bolton Law today for a confidential consultation.

Recognizing the Signs of Hidden Assets

If your spouse becomes evasive or defensive when you bring up the topic of their financial dealings, or if you stumble upon ATM receipts from unfamiliar accounts, these could be indications that your spouse is concealing assets. Unexplained large withdrawals from your shared account could also serve as a warning sign.

Your assets may include your marital home (your main residence), vacation property, financial investments, bank accounts, savings, stocks, retirement funds, pension plans, the cash value of life insurance policies, a professional practice, a business, and much more.

Common Ways to Hide Assets in a Divorce

There are several tactics people use to hide assets during a divorce.

Hiding Cash

This is one of the simplest and most common methods used to hide assets during a divorce. It involves secretly stashing away cash in a safe place where it isn’t recorded or traceable. This could be anywhere from a hidden safe in the house to a secret bank account.

Covertly Withdrawing Cash

Some individuals resort to implementing complex schemes to covertly withdraw cash. This could involve creating fictitious expenses, overpaying creditors, or even setting up shell companies.

Manipulating Timing of Revenue

Another common tactic is to engage a co-conspirator, such as a business partner or employer, to delay bonuses or promotions until after the divorce is finalized. If your spouse is a business owner, he or she may postpone invoicing until after the divorce.

Transferring Ownership of Assets

In some cases, individuals may transfer the ownership of assets to family members or friends until the divorce is final. This can make it appear as though they have fewer assets than they actually do.

Undervaluing Assets

They could declare that their car, real estate properties, or other valuable assets are worth less than their actual trade-in or market value. This can significantly reduce the perceived value of their total assets.

tell your divorce lawyer if you notice missing assets

Detailed Tactics for Hiding Assets

Here are some more detailed tactics that people use.

Accounting Tricks

Some spouses may resort to eliminating financial accounting programs or claim that a computer containing crucial financial records has mysteriously crashed. This can make it difficult for the other spouse to track financial transactions and asset values.

Reporting Asset Depreciation

In an attempt to dissuade suspicion, spouses may report an extraordinary decline in the value of marital and/or business assets and investments. By doing so, they can make these assets appear less valuable than they actually are.

Asset Transfer

Spouses can transfer assets to trusts or companies that were specifically created for this purpose. These entities can serve as a legal shield, making it difficult for courts to determine the true ownership of the assets.

Fake Sales Agreements

Fake sales agreements are concluded to show a change in ownership. These agreements can make it appear as though assets have been sold off when, in reality, they are still under the control of the spouse.

Legal Consequences in Texas

Under Texas law, all properties and assets acquired from the marriage date up to the divorce date are considered community property. These are subject to a fair and equitable division upon divorce. Judges in Texas have no patience for individuals who try to conceal assets during the divorce process.

Deliberately hiding assets in a divorce proceeding is against the law. If your spouse is convicted of intentionally hiding assets, they could be facing serious charges such as fraud, contempt of court, perjury, and violations of civil court rules.

Texas state law firmly stands behind the spouse who has been wronged by any attempts to hide assets during a divorce. The act of concealing assets is classified as a “fraud on the community” under the law. In the immediate term, a family law judge has the authority to award all concealed assets to the spouse who has been wronged.

Contact Our Divorce Lawyers for Help

While it’s unfortunate, asset hiding is a reality in many divorces. Being aware of the signs and tactics can help you protect your interests. If you suspect your spouse is hiding assets, consult with an experienced legal professional at Bolton Law to understand your options.

Contact our offices at 281-351-7897 today. We go above and beyond for our clients.