People get divorced for a variety of reasons, such as growing apart, infidelity or disputes over money and children. But a common theme is the loss of trust between the two partners.
When mistrust exists in a marriage, it’s possible that one or both spouses might try to hide assets in an attempt to put themselves in a better financial situation after a divorce.
How do spouses hide assets?
Finding marital property can be difficult, especially for high-net-worth couples and those where personal finances are comingled with a business or partnership. Assets are generally concealed in four ways:
- Claiming the asset was lost
- Denying that it exists
- Transferring it to a third party
- Creating false debt
Past tax returns can reveal red flags
Proving that your spouse is hiding assets can be challenging, but there is usually a paper trail. Looking through past income tax returns can shed light on their existence:
- Schedule A: Looking at itemized deductions can expose assets or income that is not otherwise disclosed.
- Schedule B: Identifies interest and dividends, which can be compared to an inventory of assets potentially revealing new or undisclosed property, or the disappearance of other resources.
- Schedule C: This form reveals profits or losses from business interests and includes depreciation schedules, which can disclose assets purchased through a spouse’s company.
- Schedule D: Capital gains or losses are outlined here, including real estate, stocks and bonds. This form helps identify new assets or the disappearance of others.
- Schedule E: Potentially hidden assets can be revealed in the form of rental properties, partnerships, royalties and S corporations.
Taking inventory is vital to your future
Finding all jointly-owned assets is essential when marital property is divided during a divorce. New York is an equitable distribution state, meaning a judge will “fairly” divide marital assets, but that doesn’t mean it will be an equal split.
While you should check other possible hiding places, such as safe deposit boxes, file cabinets and other locations within your home, an experienced family law attorney here in New York can help locate all marital property and increase your chances for a favorable outcome.