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When Will Hidden Assets Play a Role in a Texas Divorce?

 Posted on August 07, 2023 in Divorce

shutterstock_133292129-min-1.jpgGetting a divorce can be a complex process, and the division of marital assets can be one issue that may lead to contentious disputes and concerns about inappropriate behavior. In some cases, one spouse may attempt to conceal or hide assets during a couple’s divorce proceedings. This can have serious consequences for the other party, since it may affect their ability to receive a fair share of the marital estate.

In Texas, spouses are required to disclose all their assets and debts during divorce proceedings. However, despite this legal obligation, some individuals may choose to hide certain assets in an attempt to minimize their financial obligations or secure more favorable terms in a property settlement. A person who suspects that their spouse has engaged in this type of behavior will need to understand how to address these issues and ensure that all forms of marital property will be considered correctly during their divorce.

Mandatory Disclosure Requirements

Under Texas law, divorcing spouses must provide each other with a full financial disclosure. This will include a detailed inventory of all assets and liabilities, including both separate property and community property. Assets that will need to be disclosed include real estate properties, bank accounts, investments, vehicles, business interests, retirement accounts, and personal belongings. In addition, parties are also required to disclose any outstanding debts, such as mortgages, loans, credit card balances, and tax liens. 

The purpose of these mandatory disclosure requirements is to ensure transparency during the process of dividing marital property. If one spouse intentionally conceals or fails to disclose an asset, it is considered fraudulent behavior that undermines the integrity of the divorce process.

Uncovering Hidden Assets

Discovering whether a spouse has hidden assets in a divorce case can be challenging, but it is not impossible. It requires diligent investigation, and in some cases, assistance from forensic accountants or other financial professionals may be necessary. There are several common signs that may indicate that a spouse has hidden assets, including:

  • A decrease in reported income

    If one spouse reports that they have a lower income than what they had earned during the couple’s marriage, this could indicate an attempt to hide funds.

  • Unusual purchases

    Large cash transactions, unexplained investments, or extravagant spending patterns may suggest that property or funds are being concealed.

  • Questionable transactions

    A spouse may claim that they have used marital funds to pay debts owed to friends or family members. This may be an attempt to transfer assets to other parties with the intention of receiving them back after the couple’s divorce has been completed.

  • Misleading financial documents

    A spouse may falsify or alter financial documents, such as bank statements or tax returns, to make it appear as though the assets they own and control are worth less than their actual value.

  • Failure to maintain transparency when operating a business

    A spouse who is a business owner may attempt to hide assets through their business. For example, they may claim that they are paying a salary to an employee that does not actually exist while funneling this money into a secret bank account, or they may falsify business records to make it seem as if the business is worth less than its actual value.

The Consequences of Hiding Assets

If a court determines that one spouse has intentionally concealed or undervalued marital property during a divorce, it may impose various penalties depending on the severity of the deception. Actions taken by a spouse that lowered the value of the marital estate are known as “fraud on the community.” This form of fraud may be addressed by awarding a larger share of the actual value of the marital estate to the other spouse or requiring the spouse who committed fraud to pay a certain amount of money to their former partner. If a spouse commits egregious violations, such as by repeatedly refusing to disclose financial information or lying about their financial situation in court, they may be charged with contempt of court, which could lead to penalties such as fines or even jail time.

Contact Our Bexar County Property Division Lawyer

If you are concerned about hidden assets during your divorce, the experienced San Antonio asset division attorney at Brandon Wong & Associates can help you determine how you can protect your rights and financial interests. We will work with you to navigate complex financial issues and ensure that you will receive your fair share of the property you own. Contact us at 210-201-3832 to learn more about how we can help you complete your divorce successfully.

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