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TX divorce lawyerThere are a variety of financial issues that may need to be addressed during a high-asset divorce, and one of the key considerations for many spouses is the possibility that their former partner may be attempting to hide assets. This is often done with the intent of influencing the property division process or to reduce the amount of spousal support or child support payments that a person would be required to make.

When spouses have a high net worth, complex property litigation may be needed to sort out multiple different types of assets and ensure that they are divided properly. Litigation may also address any attempts to conceal assets or income. Concerns about hidden assets are likely to arise if one spouse is a business owner. Some common ways that a business may be used to hide assets include:

  • Misreporting income and expenses - A business’s financial records can be used in a variety of ways to conceal assets, such as by failing to report cash payments or reporting fraudulent expenses.
  • Paying nonexistent employees - A business owner may claim that they are paying a salary to an employee while funneling this money into a private account. In some cases, a person may employ a friend or family member and overpay them as a way to have them hold money until the divorce is complete.
  • Depreciating business assets - A person may claim that assets owned by a business, such as equipment, vehicles, or real estate, are worth less than their actual value. By attempting to reduce the overall value of the business, a spouse may attempt to avoid dividing this or other marital property fairly.
  • Overpaying taxes - A business owner may purposely pay more taxes to the government than are owed with the intent of receiving a refund after their divorce has been finalized.
  • Delayed transactions - A person may wait to sign business contracts or complete major transactions until after a divorce has been completed, allowing them to avoid reporting this income or any increase in the value of the company during the divorce process.
  • Transferring business assets to others - A spouse may give an ownership share of their business to a family member or friend, or they may transfer other assets into someone else’s control. This may be done with the intent of removing these assets from the marital estate while planning to resume ownership of the assets after the divorce has been finalized.

Contact Our Austin, Texas Business Valuation Lawyers

If your spouse is a business owner, you will want to make sure all of the financial issues related to the business are considered properly during your divorce. At Powers and Kerr, PLLC, we will work to make sure all business assets and financial records are uncovered during the discovery process, including working with forensic accountants to gain a full understanding of the value of business assets and all forms of income and cash flow. We will help you determine how these matters should be addressed during the divorce process, and we will work to protect your rights and financial interests at all times. Contact our Austin high asset divorce attorneys today at 512-610-6199.

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TX divorce lawyerAll divorce proceedings are complex and potentially emotional for the parties involved. High asset divorces, however, tend to come with their own set of unique issues. For instance, hiding assets is much more common in divorces where one or both spouses have significant, unique, diverse, or particularly valuable assets. Fortunately, there are steps that divorcing parties can take to ensure that their spouses are not attempting to hide assets, so if you and your spouse have decided to file for divorce and you are concerned that he or she may be attempting to hide or waste assets, it is critical to speak with an experienced high asset divorce attorney who can explain these steps to you and ensure that your property is protected.

Most Common Methods of Hiding Assets During Divorce

Unfortunately, it is not uncommon for one spouse to try and hide assets from the other during divorce by utilizing one or more of the following methods:

  • Transferring marital assets out of a joint account into a newly created or already existing account that is only in one spouse’s name;
  • Transferring cash or investments to a friend or relative’s account until the divorce is finalized;
  • Purposely overpaying the IRS and instructing the agency to use the current year’s refund for next year’s taxes;
  • Taking cash withdrawals on debit cards;
  • Delaying any promotions, raises, or bonuses until after the divorce is finalized;
  • Delaying receipt of commission payments; and
  • Purposely failing to report employer retirement accounts or stock options to the financial analyst.

Couples who own an interest in a business have even more options when it comes to hiding assets, including:

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Texas divorce lawyerThe financial issues that couples must tackle during divorce are some of the most complicated problems that come with dissolving a marriage, especially for couples with significant or diverse assets. In these situations, consulting with a forensic accountant who can help identify concealed assets or appraise unique assets is crucial, so if you and your spouse have filed for divorce and have varied assets, you should consider speaking with an experienced high asset divorce attorney who can help connect you to a well-respected and efficient forensic accountant.

What Is Forensic Accounting?

There are four main financial components to most divorces: assets, income, debts, and expenses. Forensic accountants can help with each of these areas by collecting and analyzing financial documents and then communicating the findings to the clients or the court. This involves completing a wide range of smaller asks, including:

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Texas divorce lawyerAlthough going through a divorce usually tends to be an emotional and complex process regardless of a couple’s finances, those with significant assets are faced with unique problems. For instance, many high assets couples have multiple sources of income, including investments, stocks and bonds, and stakes in businesses, as well as a wide variety of valuable assets ranging from paintings and antiques to automobiles and real estate. In these situations, recording and inventorying all of a couple’s assets can be difficult, especially if one of the spouses is attempting to hide assets. In high asset divorces, it is much easier for a spouse to get away with this type of conduct, so if you are considering divorce and are concerned that your spouse has begun to hide assets, please contact a Round Rock high asset divorce attorney who can assess your financial situation and ensure that your interests are protected.

Distributing Assets

Texas is a community property state, which means that assets acquired by a couple during their marriage must be divided equitably upon divorce. There are a few exceptions to this rule, which apply in cases where one party received an inheritance or gift during the marriage. However, even in these situations, the parties could be required to divide the assets if they were later commingled with marital property owned by both parties. Furthermore, each party is permitted to retain sole ownership over all assets obtained prior to the marriage.

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Texas high asset divorce lawyer, Texax complex divorce attorneyA survey by the National Endowment for Financial Education found that 30 percent of spouses have been deceptive about money with their spouse, and almost 60 percent admit to hiding money from them. Considering these statistics, it is not surprising that one of the most contentious issues in a divorce is the division of assets. It is not uncommon for one spouse to try to hide assets from the other in order to avoid sharing those assets.

When couples are dissolving their marriage, they are required to provide financial affidavits to the court which reveal any assets they have. Although providing false information to the court is illegal, many spouses would rather take their chances and lie about their assets so they do not have to share them with their soon-to-be ex-spouse. If you are going through a divorce and think that your spouse is hiding assets from you, there are steps that you and your high asset divorce attorney can take in order to find those assets, including:

  • Subpoenas: Your attorney can file a subpoena to any financial institutions that your spouse banks at or your suspect he or she may have accounts at which will require they provide all financial statements and cancelled checks;
  • Forensic accountant: Unlike a traditional accountant, a forensic accountant also utilizes auditing and investigative skills to conduct an examination into an individual or company’s financial records;
  • Private investigator: A private investigator can conduct surveillance on a spouse to document any activity which may indicate hidden assets. A private investigator can also conduct a skip search which uncovers personal information on a spouse, such as credit information, utility bills, title information, and business licensing. These are all items which may indicate assets are being utilized which come for a source a spouse has not revealed.
  • The Internet: Many people do not realize just how much information is contained on the Internet. For example, if a spouse has purchased real estate as a way to hide assets, that transaction is most likely public record published on the web.

Other places that often reveal whether a spouse is hiding assets is their social media sites and Internet browsing history. Browser histories could reveal multiple visits to a bank’s website that the couple do not have funds at. Social media sites, both personal and professional, can reveal all kinds of information, such as posted photos and comments from friends and business colleagues which may reveal that a spouse has more funds than they are revealing.

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Cedar-Park high-asset divorce attorney, hidden assets, high-asset divorces, uncovering hidden assetsHiding assets from another spouse is an all too common scenario in high-asset divorces. Often, the offending spouse feels he or she is entitled to those assets and the other spouse is not. Hiding assets in a divorce is against the law; however, even that fact does not deter an unscrupulous spouse from keeping the other spouse from his or her fair share of a marital estate.

In many cases, this attempt of hiding assets is discovered during the divorce, often through the discovery process or with the aid of forensic accountants, however, there are also cases where the offending spouse succeeds in hiding the assets and they are not included in the final marital estate division.

If you have discovered that your ex-spouse hid assets during your complex divorce case, there is a good chance that you may still be able to recover what should have been legally awarded to you. The state of Texas has a legal statute which allows an ex-spouse to recoup undisclosed assets. The law is called Suit to Divide Undivided Property and is part of the Texas Family Code.

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