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TX divorce lawyerIt is not uncommon in marriages for one spouse to handle a majority or all of the couple’s finances while the other spouse has little to no input on these matters. Family law attorneys and psychologists have a specific term to refer to the spouse who has little say in financial matters: the “out-spouse.” When you are the out-spouse, it can be fairly easy for your partner to hide assets or other property in an attempt to keep more than his or her fair share of the marital estate during divorce. Part of the divorce process is dividing your marital assets so that you and your spouse each get your fair share. To ensure your property is divided fairly, you have to have at least some idea of what your financial situation looks like, which is rarely the case if you are an out-spouse.

The Discovery Process

If you suspect your spouse is hiding assets from you, chances are he or she will not be willing to come forward and reveal those assets and financial records willingly. During your divorce, your attorney will attempt to obtain this information through what is known as the discovery process. This process is a way that your attorney can formally ask your spouse for financial records. The court can take further action in pressuring your spouse to provide the required information if he or she remains uncooperative.

The basic steps of the discovery process include:

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TX divorce lawyerHigh asset divorces in Texas are complex for many reasons, from community property that is of high-value and difficult to properly appraise to hidden assets. We often think of hidden assets as specific property, both tangible and intangible, that one spouse might try to conceal from the other spouse and from the court. For example, hidden assets often include out-of-state or overseas bank accounts or investments, business holdings, and even real estate. Yet another form that asset hiding can take is when the higher-earning spouse attempts to conceal his or her actual earnings. Income must be reported accurately to the court. If a spouse does hide the full amount of his or her income, Texas law allows the court to award the other spouse a higher amount of the community property. The spouse who hid assets can also face additional penalties.

If you do not know your spouse’s actual income and are preparing for a divorce, it is essential to work with an aggressive high asset divorce lawyer in Texas who can assist you. The following are some of the ways that you and your attorney can determine your spouse’s actual income.

Locate Tax Returns

If you have access to previous tax returns, especially if you filed jointly with your spouse, it is important to get copies of those tax returns as soon as possible. Your jointly filed tax return can allow you to determine your spouse’s reported income for those years. If you are married filing separately and may have access to both of your tax returns, you should make any copies so that you will have this information.

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TX divorce lawyerDivorces can be extremely contentious regardless of the income levels of the spouses or the amount of assets they share. However, high net worth divorces in Texas often are among the most contentious, given that the parties have more to lose financially than other couples who are going through the divorce process. When one or both parties realize that divorce is likely in their futures, issues about hidden assets may start to arise. If you have concerns about your spouse hiding property or trying to prevent certain assets from being classified as community property, you should reach out to a Texas high asset divorce attorney as soon as possible. At Powers and Kerr, PLLC, we routinely assist clients with this very issue and can discuss options for working with a forensic accountant to locate hidden assets.

In the meantime, we want to provide you with some useful information about recognizing when a spouse may be trying to hide assets before a divorce.

Why Would a Spouse Attempt to Hide Assets?

Why would any spouse in Austin, Texas try to hide assets before a divorce case? As you may know, Texas is a community property state. What this means is that, under Texas law, nearly all property acquired by either spouse after the date of the marriage will be classified as community property and will be subject to division in the divorce case. A spouse might try to hide assets to prevent those assets from being classified as community property and divided. There are many different ways that people can try to hide assets, and it is important to recognize the signs. If you do have concerns, you should speak with your divorce lawyer as soon as possible.

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TX high asset divorce attorneyOne of the factors that sets high asset divorces apart from many other divorces is the practice of hiding assets. Fortunately, there are steps that divorcing parties can take to discover and report attempts by their spouses to hide assets. However, taking these steps usually requires the assistance of professionals, including a forensic accountant and a high asset divorce attorney, both of whom can help track down assets and thereby ensure that any settlement agreements entered into by the parties account for all of the couple’s property.

Utilizing the Discovery Process

Couples who litigate their divorces are required to provide each other with copies of important documentation and to submit to questioning. By requesting the production of documents and issuing interrogatories, a high asset divorce lawyer can help get to the bottom of a couple’s financial situation, as parties who refuse to produce documentation as ordered, or who lie while under oath, face strict penalties.

Following Paper Trails

Divorcing spouses attempt to hide assets in a number of different ways, including:

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