This article was originally published in Westchester Magazine.
It’s no secret that divorce can bring out the worst qualities in some people, and hiding assets and income is unfortunately rather common. The ways in which people go about hiding assets are varied and can include siphoning money slowly from joint bank accounts, making large purchases that will later be converted to cash, and placing money in off-shore accounts.
If you think your spouse is hiding assets to keep them from being part of your divorce settlement, don’t panic. There are still several courses of action you can take to make sure you’re getting your fair and equitable share of assets in the final divorce decree.
1. What can income tax returns and other financial statements tell me about possible hidden assets?
One of the best ways to trace assets is through income tax returns, which show income earned from assets as well as asset sales. Returns also reveal evidence of foreign bank accounts and can provide tracing leads to forensic accountants, discussed more fully below. You may be able to locate these records as well as bank statements, mortgage statements, or other correspondence from the IRS yourself, but do be careful that you are looking only in places you have access to, i.e., not hacking into your spouse’s email account.
2. How can an attorney help me locate hidden assets?
Discovery is the legal process for requesting potential evidence from the other party, and in a divorce, your attorney can request various financial records. You may ask for documents as well as send a list of questions for which your spouse must provide truthful answers. A deposition is a legal procedure during which your attorney can ask questions of your spouse under oath and under the penalty of perjury, which means if they lie, they can face severe sanctions from the court.
3. Can the court help me locate hidden assets?
If you believe your spouse is being dishonest during discovery, you can ask the court to authorize an asset search and a credit report to reveal any undisclosed assets. Failure to comply with a court order also carries sanctions.
4. Is there such a thing as a professional asset finder?
Actually, yes. Forensic accountants specialize in investigating potential fraud and concealment
of assets and income. They compile and analyze financial data and may also conduct a lifestyle or spending analysis to determine whether purchases can be traced back to the person or couple – or whether there is likely some hidden source of funds.
5. If my spouse involved others in hiding assets, what can I do?
Some people turn to others to help them hide assets, for instance, by buying expensive gifts for a lover or by creating a false debt to a friend who will then return the cash once the divorce settlement is final. Your attorney may choose to conduct depositions of these third-parties to get to the truth.
Going through a divorce is one of the most stressful life events any person can go through, and having an uncooperative spouse only makes it harder. This is why you need to have someone on your side who can represent your best interests as early in the process as possible. Call us at 914-831-7000 today to start taking control of your divorce.
About James Nolletti
Peace of mind and security is what Nolletti Law Group offers high-net-worth clients facing divorce. With over three decades of experience as an accomplished negotiator and litigator, James Nolletti has extensive expertise in matrimonial and family law. James Nolletti is an active Fellow of the American Academy of Matrimonial Lawyers (AAML) and the International Academy of Family Lawyers (IAFL) and is board certified by the National Board of Trial Advocacy (NBTA) in Family Law. He has earned the designation “Certified Financial Litigator” from the American Academy of Certified Financial Litigators and is a founding member of their N.Y. Chapter. He has been repeatedly recognized for his expertise by his peers in the Best Lawyers in America.