Uncovering Hidden Assets in Your Dallas, Texas Divorce

According to the Texas Family Code, Sec. 3.002, Texas is a community property state, meaning that all assets and possessions acquired during the marriage belong to both you and your spouse, and that during divorce, those assets and possessions will be subject to equal division, no matter which spouse “earned” or “acquired” the property in the first place. Furthermore, Texas law works under the assumption that all assets are community property, unless one or both individuals can provide clear and convincing evidence to the contrary. During a Texas divorce, one or both spouses may find the community property law to be unfair, and may try to misappropriate their own individual assets so that when the time for property division comes, those assets will be squarely hidden away and therefore, free from scrutiny. These assets are referred to as “hidden assets,” and hiding assets during a Texas divorce can place in individual in contempt of court, and subject them to charges of perjury and fraud.

Ways an Individual May Try to Hide an Asset

If you are going through a divorce in the State of Texas, it would be in your best interest to take stock of everything that you and your spouse accumulated during marriage, and to have strict records of everything from your financial accounts to your debts. When you are familiar with what you should have, it makes it much easier to spot what is missing. With that in mind, if you start to notice large withdrawals from your joint bank account, the complete closing of an account, or that certain valuables are going missing throughout your home, your spouse may be trying to hide some of your assets. Some ways in which an individual may try to hide marital assets include:

  • Transferring money or property out of a joint account or joint possession, and into the possession of a friend or relative;
  • Making investments abroad, or opening accounts overseas;
  • Suddenly spending large amounts of money on frivolous activities or purchases;
  • Funneling money into a business entity under the guise of additional payroll or business expenses;
  • Altering or destroying financial records completely;
  • Setting up a bank account in your minor child’s name;
  • Making payments towards debts that do not exist; and
  • Having antiques and valuables appraised for much less than what they are actually worth.

How to Detect and Locate Hidden Assets

If you and your spouse are going through an ugly divorce, and if you suspect that he or she may be hiding assets, the first thing you are going to want to do is start a paper trail. First, gather all records of your joint and separate accounts, as well as any statements of debt. Accounts may include bank accounts, savings accounts, IRAs, and investment funds. If you or your spouse own a business, make sure you gather all financial records for the business as well. If you own property, gather property records. Make copies of both yours and your spouse’s tax returns for that year and previous years. Once you have all of the documentation in order, collect the names and contact information of the institutions that hold the assets or funds. Take all of this information to your Texas divorce attorney and/or financial advisor, who will help you review it for unusual and suspect activity.

If you lack hard evidence, but suspect that your spouse has misappropriated assets, think about how your spouse acts in regards to your finances and conversations of finances. Does he or she close up when you mention money or property? Are they unwilling to share important information with you, such as the name of your financial advisor, the valuation of a family heirloom, or what investment opportunities he or she is involved in? Has your spouse ever flat-out refused to grant you access to an account entirely? All of these actions may indicate that your spouse is in the process of hiding or has hidden marital assets.

Consequences of Hiding Assets in a Divorce

The Texas courts do not look favorably upon individuals who hide assets during a divorce, and may impose civil or criminal penalties for such actions, depending on the severity of the offense and the laws of your state. In some instances, an individual who hides assets during a divorce may be ordered to pay the investigation fees of the opposing party, risk having any prenuptial agreements voided, and risk losing a majority of all marital assets.

In some states, if you are caught hiding assets in the face of divorce, you may be held in contempt of court, a misdemeanor that carries a punishment of fines and/or jail time. If you lie under oath about your marital assets, you may be charged with perjury, which is punishable by additional jail time. Furthermore, you may be charged with fraud for deceiving the other party, a criminal act that carries a punishment of restitution and jail time.

Contact a Dallas, Texas Divorce Attorney

At the Law Offices of Udeshi Clark and Associates, our divorce attorneys can assist you in the review of all financial statements, statements of debt, property records, and account information in order to look for clues of misappropriation of assets. If we find any suspicious activity, we will help you prove to the courts that your spouse has hidden marital assets, and ensure that in the end, you receive the proper portion of marital property that you deserve. To consult with a Dallas divorce lawyer about revealing hidden assets, contact our family law firm at (469) 914-5564 or online today.