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Locating hidden divorce assets

A divorce often reveals unethical behavior, even among the affluent spouses who engage in complex maneuvers to hold onto assets. Spouses may consider unusual options to hide assets to lower alimony and child support payments.

Spouses begin planning to hide property well before the divorce process begins. A spouse may consult with a financial planner and even assume lots of debt to make it appear as if the spouse's estate is worth less than it is.

Personal and business documents should be reviewed closely, especially if numerous business entities are involved. Income may have been written off as entertainment expenses instead of being disbursed to the spouse. The business owner may intentionally divert or delay receiving income to lower support payments.

Oil leases are often involved in Texas divorces. A spouse may claim that a leasing deal failed or could not produce oil even though the spouse may own an adjacent lease through a trust where a well contained oil.

Assets may be hidden in joint partnerships where assets are stored with family members or friends.

Businesses are sometimes routed through another state that has different laws. Tracing these assets may require hiring attorneys and seeking judicial relief in that state. In more complex cases, a spouse may hide assets in foreign countries that allow the hiding of property through the creation of trusts.

There are consequences for hiding property. Spouses must answer discovery requests on their assets with total candor. They must be able to show the source of the money used to make large purchases. However, a spouse may show that an asset is not part of the spouses' community property.

Under Texas law, a judge may reconstitute a marital estate and add any missing money to the couple's community property. The judge can also award missing or hidden funds to the spouse who cannot account for these funds because on their reckless spending. The other spouse can then receive existing assets as an offset.

A judge can also divide the community property in a ratio favorable to a nonoffending spouse when the judge suspects the other spouse is hiding property. These orders are infrequently reversed on appeal.

An attorney can help locate hidden assets and assure that rights are protected during asset division. They can provide the legal options for seeking a fair and reasonable decree.

Source: Texas Lawyer, "What happens when a spouse hides money during a divorce?," By Douglas R. York, Esquire, Jan. 1, 2018

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