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San Jose Divorce Lawyers Blog

Is My Spouse Trying to Hide Assets?

One of the most common questions a divorce lawyer in San Jose hears is how to tell if your spouse is hiding assets. Because you know your spouse better than the attorney, when you ask that question it usually means that your spouse is hiding money somewhere, but you just do not know where. You should listen to your instincts. Divorce makes people do things they wouldn’t normally consider, such as looking for ways to hide assets. If you’re in the middle of a divorce, you need to be aware of the common ways people attempt to hide assets and the steps you can take to protect yourself.

One example of a way spouses can try to hide assets is by vastly overpaying on an income tax return, then filing an amended return after the divorce is finalized in order to receive a refund. This is less painful than when they lie on the last joint tax return, and you later get a nasty letter from the Internal Revenue Service stating that you must pay up. Spouses who own a business may try to hide assets by allowing customers to defer payment until the divorce is finalized or by putting off necessary repairs in order to decrease the value of business assets, or doing the exact opposite by doing numerous repairs to consume all the available funds and thereby show inflated business expenses at the time of Dissolution.

Hiding assets during a divorce is a breach of fiduciary duty. However, a penalty only occurs if the spouse’s deceit is discovered. Therefore, it’s up to you to make sure your best interests are protected in your divorce settlement.

Any financial documents you can find will be helpful in determining if assets are being reported fairly. This includes income tax returns, credit card bills, loan statements, and bank statements. Try to find several years worth of documentation in order to accurately determine a pattern of income and expenses.

One major clue that your spouse may be attempting to hide assets is if paperwork that was once delivered to your home is no longer showing up. Another clue is if you had access to records, but that access has been taken away, as when your name is taken off of a joint account, or the lock is changed on the file cabinet that used to hold the business records. If your credit card statements are now delivered to your spouse’s workplace instead of coming directly to your home, this is a significant red flag that he or she may be attempting to hide something.

If you are concerned your spouse may be trying to hide assets, discuss this issue with a good divorce attorney in California. He or she can provide advice specific to your situation, as well as helping you to determine if it may be necessary to hire a forensic accountant for your divorce proceedings.