Ensuring Fair Asset Division During a Divorce

Divorce can sometimes bring out the worst in people. Hiding assets is one way a spouse tries to hurt the other. In a community property state like Texas, this particular tactic is common, especially in high-asset divorces. Fortunately, there are methods for uncovering hidden property and causing the offending spouse to face monetary, and sometimes criminal, consequences.

Community Property in Texas

In a marriage, Texas law defines property as either community or separate. Separate property is owned by one spouse prior to the marriage and can also include some inheritance or gifts received during the marriage. Community property includes assets acquired during the marriage, from real estate to retirement accounts and wages, and more.

In a Texas divorce, community property must be divided equally between the spouses if there is no prenuptial agreement stating otherwise. It is this equal division that drives some spouses to stash away assets to keep them from the other spouse.

Property accrued during a legal separation is still considered community property. Each spouse should not spend community funds frivolously or acquire unnecessary debt.

Examples of Hidden Assets

There are several ways someone can try to hide or minimize their assets, including:

  • Opening a bank account in the name of a relative or friend
  • Opening offshore bank accounts
  • Getting cash back on everyday purchases and stashing the cash elsewhere
  • Signing over a quitclaim deed on property to a friend (understanding they give it back after the divorce)
  • Assigning a lower value on collectibles or memorabilia
  • Giving valuable items, temporarily, to a friend or relative
  • Reducing their income, especially easy for self-employed
  • Overpaying the IRS (and receiving the refund check after the divorce)

Signs Your Spouse May Be Hiding Assets

The money trail can be hard to follow, and some people begin hiding assets years before the divorce.

Luckily, there are signs you can watch for that might indicate your spouse is trying to hide assets, including:

  • Inflating living expenses
  • Moving money between accounts
  • Making unusual cash withdrawals
  • Refusing to answer your financial questions
  • Deferring a promotion or bonus at work
  • Removing items from the home without your permission
  • Using a tax refund to pay off future estimated payments

Consequences of Hiding Assets

Chapter 7 of the Texas Family Code calls hiding assets “fraud on the community.” When the court has ruled that one spouse was hiding assets, the judge will recalculate the estate to include the hidden assets. While the judge can still split the reconstituted estate equally, they do not have to follow the usual division rules when fraud was attempted. When hidden assets are discovered, Texas courts can inflict harsh penalties. A judge can award all the property one spouse was attempting to hide to the other spouse. Depending on the situation, the offender could be charged with contempt of court, perjury, or fraud and could be forced to pay the legal fees of the victimized spouse.

How Your Attorney Can Help Uncover Hidden Assets

Our experienced divorce attorneys at The Springer Law Firm know how to help bring these hidden assets to the surface.

Discovery Process

The formal discovery process includes requiring your spouse to provide specific documents, such as financial statements and tax returns. Written questions can also be used to compel your spouse to admit specific statements in writing. Property, including safe deposit boxes and fine art collections, can be inspected. In an oral deposition, your spouse gives testimony under oath before a court reporter. They must answer your attorney’s questions.

Forensic Accountants

A forensic accountant will investigate income tax returns, public records, checking and savings accounts, credit card statements, stock certificates, property deeds, and more. Part of their work includes evaluating information provided by the spouse and invalidating any false accountings. Their review can extend to any business holdings as well, checking to see if a spouse is running personal expenses through the business to deflate the business’ value.

Experience Makes the Difference

With more than 85 years of collective experience in family law, our attorneys know the red flags and irregularities to watch for during a divorce. Wanting to uncover hidden assets is not only important for you, but also for child support calculations.

The Springer Law Firm can help you work toward fair asset division. Contact us at (281) 990-6025 or use our online form to schedule your consultation.

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