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Divorce: How to Find Those ‘Hidden Assets’

In many divorces, the client will ask the lawyer “How can you find my spouse’s hidden assets?”  There are a number of ways to do so. Sometimes it might be necessary to hire a forensic accountant to assist, but often just using the following steps may help.

  1. ‘Discovery’ is the means to collect documents from the other side in a divorce case using the tools provided under the Rules of Procedure. Your lawyer will use discovery to gather back tax returns, bank statements, credit card statements, financial statements (for example, what your spouse gave to the dealership when  your spouse bought that new car last year), pay statements and other records. Read through these and look for items that do not match the reported income the spouse is showing.
  2. Compare your spouse’s income with the credit card and bank statements.  Are large monthly credit card bills getting paid off in full in amounts more than the spouse’s reported income? How is that possible? If bank statements show more money being deposited than is earned, what is the source of the extra money? If bank deposits are routinely less than the monthly income, where is the money going that is not being deposited?
  3. Look carefully at the credit card charges. Are there items that raise suspicions such as hotel bills or airplane tickets for cities you never knew your spouse visited? Jewelry and other items that you know your spouse did not purchase for you?
  4. Obtain your spouse’s income history from the employer. Look for deferred compensation, particularly if  this is not typical in the past, or for increased contributions to retirement plans or any other employer-employee payments or changes in compensation that may have been done in anticipation of the divorce.
  5. Carefully review  bank statements to see if money is being withdrawn and deposited into another account of which you were not previously aware.
  6.  If your spouse owns a business, a forensic accountant may be needed to value the business and determine the actual income it produces. This can be critical in an alimony or child support case.

Divorce is a difficult experience but with the help of a knowledgeable and experienced attorney it can be made easier through appropriate financial discovery. Do not hesitate to ask and to receive copies of all of these documents. Take the time to read through the papers yourself and let your lawyer know if  you have discovered something financially unusual and worth discussing.

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