Here are some answers to some of the most commonly asked questions we hear:
Q: What kind of hidden income and assets should I be looking for and where can they be found?
A: There are many ways a spouse can hide income or assets. If one spouse is more tuned in to the financial situation of the couple during the marriage and is aware that divorce may be on the horizon, that spouse can simply begin to take large cash withdrawals from accounts, set up separate accounts, give money to a relative or friend to hold, or even just stuff cash into a mattress. It really pays to be aware of your financial situation before things ever get to this point.
This can be accomplished by making sure you know what each of you is earning and what kinds of investment or retirement accounts you have. If your joint income doesn’t seem to balance with your assets, expenses, and general lifestyle, this is a huge red flag. If you haven’t been tuned in during the marriage and are now facing divorce, an attorney or a financial professional, such as a divorce financial analyst, can look at all of your household information and see if it adds up or if there are areas of suspicion. When one or both spouses owns a business, there is a special need for caution. Businesses provide multiple opportunities for disguising or deferring income, and a close examination of the financial records of a business is always called for in a divorce.
Q: How can a spouse send requests for records to mortgage companies, banks, retirement plan administrators, and other third parties when they are not aware of the addresses, phone numbers, etc?
If you know the name of the business, a simple internet search will usually provide you with the information you need. If there is an individual involved who has hidden contact information, there are many low cost services on-line that will find information for you by checking various consumer data bases. If you believe assets are hidden but you really don’t know where or with whom, then that’s a more difficult situation. An attorney or private investigator might be able to help.
Q: What can you do if a divorcing spouse will not share financial records with you or does not share all of them?
A: First you want to ascertain whether your spouse is intentionally hiding records or is simply overlooking something. You can start by just making a list of all financial records that you believe exist and asking your spouse to produce them. Some divorcing spouses are able to work together to locate all of the necessary records. On the other hand, if you believe your spouse may be intentionally hiding something, then you will need to be more creative. It’s harder to hide things now than it used to be. The act of hiding assets often creates a virtual trail, such as a web-search history. Be careful before you hunt around on your own though. You should consult with an attorney to be sure that whatever search method you are using is legal, or you may find that you are unable to use what you have uncovered in court. If you suspect that significant assets may be hidden, it usually pays to get legal advice. Attorneys, financial professionals, and private investigators know where to look for things and often have access to sophisticated search tools.
An attorney can also help you employ formal “discovery” methods, such as interrogatories, requests for production of documents, depositions (oral testimony under oath) and subpoenas. Using these methods correctly and effectively is tricky, and finding hidden assets often requires a great deal of probing. A skilled attorney will know which methods to use and what questions to ask. Discovery requires a spouse to produce all records, and a spouse who holds information back is risking monetary sanctions from the court. Unfortunately, some spouses will still withhold information. An attorney can help you decide what other steps are appropriate.
Q: What does an attorney with experience in asset search and investigation help in uncovering hidden assets?
An attorney who has experience with finding hidden financial assets will know what needs to be done and when, whether this means formal discovery, subpoenas, a thorough business analysis, use of sophisticated search software, the help of a financial advisor, or the help of a private investigator.
Q: How can I find out if my spouse has a safety deposit box?
You can use the same methods you would use to find other assets, including using discovery to request an identification and inspection of the contents of any safety deposit box containing marital assets or assets owned by the spouse. Banks keep safety deposit box records, including records of when boxes were accessed and by whom, and bank records can be subpoenaed.
Q: How common is it for divorcing spouses to hide assets?
A: Unfortunately, it’s rather common. People tend to feel very threatened when confronted with financial insecurity. The hidden assets don’t always amount to an enormous amount of money though. Often it’s just a matter of one spouse starting to squirrel some funds away into a separate account because they sense that the marriage is under stress and start to panic.
What specific questions and concerns do you have about hidden assets? Please read more about finding hidden income and assets in the context of a New Jersey divorce, or contact us for your confidential consultation.