Believe it or not, often in the context of a divorce action, it becomes somewhat evident that one spouse may be hiding assets from detection so as to prevent those assets from being subject to division. In addition, we often meet with clients who suspect their spouse is secretly maintaining assets or money in unknown places and of unknown amounts. Sometimes, even a cursory examination of the financial landscape, particularly in light of the known assets, debts, and relative incomes of the parties, quickly reveals serious and troubling questions. It may be that the incomes can’t possibly justify and support the accustomed lifestyle, or it could be that the money in the bank account doesn’t offer an accurate depiction of everything the client and their spouse should have. Another common situation is when the client before us is the “non-monied” spouse who has been financially controlled by the other or a spouse who has been kept in the dark, whether by one person’s manipulation or by the other’s choice, about the financial affairs of the marriage. In cases such as these, and for purposes of a divorce or in determining support obligations, it is necessary to first determine what assets and income are subject to division. And while it should be expected for your spouse to be forthcoming and provide full financial disclosure, it is incumbent upon you to ensure that your own interests are protected.
Clues That May Lead to the Possibility That Your Spouse Is Hiding Money or Assets
The following are clues that may lead to the possibility that your spouse is hiding money or assets:
- Does your spouse have sole control of all financial and bank accounts?
- Does your spouse have bills and financial mail delivered to an address different than your home?
- Does your spouse control your spending habits and limit your ability to review financial information?
- Do you and your spouse live a lifestyle above your financial means?
- Did what you and your spouse could afford suddenly and mysteriously decline when marriage difficulties began?
- Does your spouse have multiple bank accounts or do you notice that he or she makes numerous transfers, large deposits, and withdrawals from one account into another?
Examination of Income Tax Returns Can Lead to the Discovery of Hidden Assets
Income tax returns are one of the first places to look for possible clues as to the existence of hidden assets. The return should provide the source of income, whether it be from employment, interest from interest-bearing accounts, dividends, rental income, or gain or loss from the sale of stock. Each page of the return should be analyzed carefully as it can provide a roadmap and clues to the discovery of income-earning assets and asset sales.
Other Ways to Discover Hidden Assets
However, not all evidence of hidden assets will be reflected on a tax return, as people who do not want income or assets to be detected often do not report or disclose such income or income-producing assets to the taxing authorities. If such a case is suspected, you may want to engage your spouse in a conversation and approach him or her with the concerns or questions you may have. Or, it may be advisable to first seek out what information you can find around the house where you reside with your spouse, whether it be in the file cabinet with other financial documents or perhaps in other, secretive locations you discover around the house. In some situations, it may be advisable to hire the services of a qualified private investigator to assist in determining what activities your spouse is engaging in, whether they include gambling, trips to banks or other financial institutions, making large payments in cash, or other secretive activities or otherwise unknown conduct.
Consultation with An Alabama Divorce and Family Law Attorney
Because the process of finding assets or proving previously unreported income is often one of the hardest and most difficult tasks in a divorce action, the cost of conducting discovery or a forensic analysis must be weighed carefully against the potential benefits, as the cost can quickly outweigh the value of any potential benefits that may be uncovered. If you suspect that your spouse or former spouse may be hiding assets or income in an attempt to shield those from being discovered, please make your attorney immediately aware of your suspicions. If you would like to have a consultation with one of our attorneys at Boyd, Fernambucq, & Dunn, P.C. to discuss these or other concerns going forward, please contact us here to schedule an appointment.