Posted on April 17, 2018
What once was proudly built and earned together becomes “mine” or “yours” during a divorce. In this very emotional time it is not unheard of for couples to fight over the better blender. Ex-spouses battle for everything, from the smallest things (like dishes, furniture or even plants), to bigger assets such as real estate. Making the decision to live apart is easy to execute, it is dividing family assets that sadly sometimes make even the most enlightened individuals act in savage ways. In an effort to protect themselves and what they might have earned, people resort to hiding assets from their partner to minimize having to split them in the divorce.
Hiding Assets During A Divorce In Colorado
According to Colorado law, spouses must honestly report all of their assets, debts, expenses and income during divorce proceedings. When going into a divorce, it is smart to start by listing out all assets, together. That will make the divorce process more honest and fair for both parties. Assets could include:
- Your home or any joint property (land, rental property, a vacation home, etc)
- All vehicles
- Bank accounts (including full balances)
- Securities (stocks, bonds, money market accounts, CD’s)
- Valuable collectibles (a restored classic vehicle, antique collections, coin collections)
- Household items (furniture and appliances)
- Retirement plans
- Owned businesses and their assets
- Boats, RVs or other recreational vehicles
In most cases people are honest, understanding that they are indicating to the divorce court, under penalty of perjury, that they have provided a complete listing of their assets and debts. Every now and then, there will be that one case when the divorce does not go as smoothly. Some people are tempted to hide assets or alter their value in order to benefit in the long run. And the reality is that some of them are not caught. Fortunately, with the help of an experienced family law attorney, such as the team we have at Pollart Miller LLC, you can get the expertise of assessing whether there are items being concealed.
Similarly, people come to us after their divorce is done; sharing that they have suspicions the other side hid something from them. The law offers parties in a Colorado divorce case a remedy, via a five-year window, in which to seek relief if hidden or undisclosed assets are discovered.
Below are a few additional questions we often get, regarding hiding assets during a divorce. The presented information does not aim to provide legal advice. We understand that each divorce case is unique, and invite you to contact Pollart Miller LLC for a consultation about your case.
Can you hide assets legally?
Hiding assets from a prospective ex-life partner is not legal as the law requires full and complete disclosure of all assets. During a divorce, you are required to share a full divulgence of assets under penalty of prevarication. If non-unveiled assets are found, the court will most likely assign greater benefits to the negative impacted spouse and the person hiding the assets could be found in contempt which could result in a jail sentence.
What are common ways people hide assets during a divorce in Colorado?
Ultimately, when it comes to disclosing assets it comes down to positive vs. negative values. In other words, some of the most common ways to hide assets are to overstate expenses and debts and understate income and possessions.
Real estate is one area where people get caught “cheating the system”. Imagine this, a family owns rental properties as a supplemental investment and income. Usually one of the spouses is more involved with the day-to-day management of these assets. Sometimes the assets are even in just one name, due to the way the loan was taken out. In those cases the deed can be signed over to another relative or friend. Devaluing the rental properties is another way to allow the managing spouse to benefit more in the long run. A couple of examples of how that can be done include leaving certain properties unrented or in need of repairs; or contacting clients and agreeing to concede payment until after a divorce is final. This will allow the managing spouse to get the cash after the divorce and benefit from the value of the business. Anything that happens after the divorce does not benefit their ex-spouse.
Income is another place where money can be hidden. By decreasing the tax exemptions that one claims on their paychecks, causes the IRS to withhold more money in taxes. Ultimately, what they bring home is less. Keep in mind, however that with anything tax (or even income) related there is documentation to back up any change made. For example, if you overpay taxes, you get documentation on it and can either get a tax refund or allocate the money to next year’s taxes. In any case, the money does not just disappear in thin air, but you need to be able to find it.
How Can I Find Out If My Spouse Is Hiding Assets?
Be mindful of statements and/or other documents you might have gotten on a regular basis in the mail. Are they not being delivered anymore? There should be no good reason for the mail to just stop arriving. As noted previously, any subtle changes in every-day patterns can be a sign that something is going on.
In addition, be mindful of any changes in joint accounts. A spouse may withdraw large sums of money and place them into a safe deposit box titled in someone else’s name. Or they might take out a big amount to buy something expensive they can resell after the divorce is over, You should also pay close attention to how your spouse is using their debit card. Is there any unusual activity? If money is being pulled gradually, in smaller amounts it might be harder to track.
In cases like these time and attention to details are of the essence. Obtaining documentation, financial statement, etc. as quickly as possible will show any patterns of dishonesty and the volume of hidden assets.
My spouse owns a business. Can they hide assets more easily?
As a non-proprietor spouse, you should be greatly cautious. A business proprietor has many ways to hide the businesses assets. Please note that this is often an issue of valuation and not an issue of divulgence. Know that valuations have a tendency to be extremely costly to determine. Usually, this will require the aptitude of an exceptionally experienced accountant.
How do I ensure fairness during a divorce?
Firstly, you will want to be informed and always as involved as you can. Take the opportunity to completely understand your family’s finances and search for anything unusual.
You will want to employ the absolute best family law firm that you can afford. They will coordinate any investigation that might be required. They will also let you know whether any specialists are needed, for example, a specialized accountant.
How do I find an attorney with experience in dealing with hidden assets?
Divorce is really common nowadays so you can start by getting recommendations from friends and colleagues. You may also want to keep and eye and ear out for any media stories about attorneys discovering hidden assets.
As soon as you have a shortlist of 4 or 5 possible family law attorneys, it is important that you interview them all. Ask as many questions as you can. Have they done work on similar cases previously? What is this going to cost you? What are their billing rates? This period of your life is stressful and emotional, so you don’t want to compromise with your representation. Think of it as an investment in your new beginning.
Pollart Miller LLC is here to help you through this difficult time.