Can a Spouse Hide Assets During a Divorce?

Splitting up marital property during a divorce can cause tension between spouses. In particularly contentious divorces, some spouses may act poorly and uncooperatively. One spouse may believe they’re entitled to certain property and, therefore, don’t want to split it according to Texas law. 

If you are facing a contentious divorce and property split, you may wonder, Can a spouse hide assets during a divorce? Below, The Larson Law Office describes common ways spouses hide assets and how to expose a spouse hiding assets in a divorce. Plus, we describe the penalties the spouse hiding the assets could face. Speak with a family lawyer immediately if you believe your spouse may hide assets during your divorce.

 Texas’ Default Marital Property Allocation 

A spouse typically attempts to hide assets during a divorce to keep the property from being divided as required by law. Texas is a community property state, meaning all marital property is generally split between spouses.

Community property is generally all property, assets, and most debts acquired during the marriage. Separate property is generally property that one spouse acquired before marriage or property that the spouse acquired by gift or inheritance during the marriage. The separate property stays with the spouse it belongs to, and a court splits community property equally.

Both spouses typically thoroughly account for their assets to the court in a divorce, if at least one spouse wants the accounting. If both spouses are knowledgeable about their marital and separate assets, then a spouse can quickly see if there are discrepancies with the disclosures, or the spouses can choose to dispense with the disclosures altogether.. However, suppose one spouse controlled the finances during the marriage or wasn’t honest with the other spouse about finances during the marriage. In that case, the innocent spouse may not discover the problem immediately, even with disclosures being done.

Ways Spouses Hide Assets During a Divorce

A party to a divorce may think, My spouse is attempting to hide assets from the divorce proceedings. They often wonder, How can a spouse hide assets during a divorce? And what can be done about it?

Some ways a spouse may try to hide assets during a divorce include:

• Hiding cash. Your spouse may withdraw money from your joint account and stockpile the cash in an undisclosed location.
• Transferring property. This occurs when a spouse transfers property, like the title of a car, for example, to another relative. 
• Misrepresenting assets. If your spouse owns a business, they may claim that it’s worth far less than its actual value.
• Delaying invoices. A spouse who runs their own business can also wait to invoice a client until after the divorce.
• Not reporting cash income. If the spouse is self-employed, they can collect cash income to try to avoid disclosing the income to the court.
• Not disclosing assets. A spouse may flagrantly leave certain assets off their disclosure entirely, hoping the other spouse doesn’t catch them in their lie. 

There are many additional ways a spouse can hide assets.

Legal Ways to Find Hidden Assets

If you suspect your spouse of hiding assets during your divorce, your attorney can take several actions during the discovery process. The discovery process is a court-supervised information exchange process between the parties. Your attorney can utilize the following to obtain information:

• Document requests. Your attorney can require your spouse to provide documents such as tax returns, bank statements, bank account lists, loan applications, and business financial statements.
• Interrogatories. These are written questions that the other spouse must answer under oath. Your attorney can ask questions that potentially lead to your spouse’s undisclosed financials.
• Depositions. Your attorney can ask your spouse detailed questions about their financials under oath in a deposition. 
• Demand for inspection. Your attorney can demand to inspect property or assets.

Your attorney can also hire a forensic accountant to thoroughly understand your spouse’s finances and trace any hidden financials. 

Penalties for Hiding Assets in a Divorce

You may wonder, What happens when you discover that a spouse hid assets during a divorce? The penalty for hiding assets in a divorce in Texas can be quite significant. 

If the spouse fails to disclose assets, the court can order them to do so. Then, if they don’t comply, the court can limit their access to discovery, require them to pay your attorney’s fees, or even hold them in contempt of court. Contempt of court is a crime and can be punished with fines and jail time. 

Courts do not take hidden assets lightly. Sometimes, when a court discovers that a spouse has hidden assets, they’ll give the entirety of those assets to the innocent spouse. However, many people do not try to pursue these penalties against their spouse alone. An experienced divorce attorney can help you understand your potential strategies and help you pursue the appropriate penalties. 

Contact Our Office About Hidden Assets During a Divorce

If you suspect your spouse may hide assets, you need a thorough litigator who is ready and able to fight for your rightful share. The divorce attorneys at The Larson Law Office have extensive experience with complicated financial divorces. We’ll pursue every avenue to uncover hidden assets and fight for what is rightfully yours. Contact us today.