FINDING HIDDEN INCOME & ASSETS
Jan. 14, 2022
You’re in the process of divorce, and you have a nagging feeling that your spouse isn’t being honest with you. “There must be more assets than this,” you keep telling yourself. What can you do to uncover the truth?
One spouse trying to hide assets from another during divorce certainly isn’t unheard of, but it does put the other spouse in a bind. It also means that the suspicious spouse is going to need to invoke certain legal procedures to get at the bottom of the issue.
The divorce process may suddenly take on the aura of a TV drama, with the feeling-cheated spouse and his or her attorney making demands on the other spouse to, in popular parlance, “turn over the evidence.”
Getting at the truth may indeed require making demands on the other spouse that are somewhat reminiscent of civil trials where businesses challenge each other over who is hiding what.
Maybe it’s not quite that dramatic, but some of the tools that need to be employed are similar.
If you find yourself in this situation – facing divorce but suspecting your spouse of hiding assets – and you’re in or around Nashville, Tennessee, contact the family law attorneys at Brazil Clark, PLLC. Attorney Frank Brazil will listen to your story, weigh your options, and guide you toward resolving the matter so that your rights and interests will be protected.
Division of Assets in Tennessee
Like most states, Tennessee is not a community property state where everything acquired during the marriage is considered jointly owned, 50/50. Instead, Tennessee laws aim for a fair and equitable distribution of property and assets during divorce.
Tennessee, however, does distinguish between marital property – those assets acquired during the time of marriage – and separate property. Separate property is generally anything either spouse acquired before marriage or received during the marriage as a personal gift or inheritance.
In deciding upon an equitable distribution of marital assets during divorce, a court will consider:
The length of the marriage
The income and earning potential of each spouse
The age, health, and physical condition of each spouse
Whether one spouse made career sacrifices for the sake of the other
The value of the separate property of each spouse
The economic circumstances of each spouse at the time of divorce
The tax consequences of the division for each spouse
How Assets Are Hidden
If one spouse owns a business, they can manipulate the business to hide assets (money). They may pay salaries to nonexistent employees or delay closing a lucrative deal until the divorce is over. This makes it seem like they have less money than they do.
If your spouse doesn’t own a business, they can use trusts or “gifting” to sock away money until after the divorce is completed. They can do this through the gift of money to family or friends who are thereby entrusted to return it once divorce terms have been finalized. If the spouse has a paramour, that person may become a gift repository as well.
Uncovering the Truth
If you’ve been what is often referred to in legal terms as the “out-spouse” – in other words, you let your spouse maintain all the financial records – you can simply ask your spouse to turn over all the financial records. Of course, the spouse may just say they don’t exist or otherwise continue trying to hide assets. It’s then that you need the help of an attorney.
This is when tactics reminiscent of business disputes come into play.
In a business dispute, for instance, there will be a period called “discovery” when one party makes demands on the other party to answer questions, turn over documents, and otherwise provide relevant information. In a divorce discovery process, your attorney can use one or more of several similar approaches:
Make a document demand. Your attorney can demand that your spouse turn over all financial statements, tax returns, loan applications, and other documents. The court can even apply sanctions if your spouse doesn’t comply.
Submit questions. These questions are commonly called “interrogatories” in legal terms. Your spouse must answer specific questions in writing that can be used to reveal hidden assets.
Make inspection demands. Your attorney can ask to inspect property, such as safe deposit boxes or even art collections, to evaluate their value.
Call for an oral disposition. This is where you, your spouse, and both attorneys appear before a court reporter to answer questions. Since you and your spouse are under oath, if the spouse hiding the assets doesn’t tell the truth, he or she can be subject to perjury charges. The prospect of perjury may be enough to compel the spouse to reveal the truth.
How Brazil Clark, PLLC Can Help
If a spouse is hiding assets, the other spouse is probably not going to be able to reveal the truth by acting alone. You will definitely need the aid of an experienced and knowledgeable attorney who can use the discovery process to compel the dishonest spouse into revealing what’s being hidden.
If you’re facing a dishonest spouse in a divorce in or around Nashville, Tennessee, or anywhere in Rutherford County, contact Brazil Clark, PLLC. Attorney Frank Brazil will protect your interests and use every legal tool to uncover hidden assets, aiming for an equitable distribution of all property upon divorce.