Couples have many different reasons for ending a marriage, and each divorce has its own set of unique issues, whether it’s infidelity, disagreements over money or gradually growing apart.
One common theme in most divorces is a lack of trust by both partners. When mistrust is present, it’s not a stretch to consider that one or both spouses will try to hide assets to improve their financial situation after a divorce is final.
What are some common hiding places?
Finding hidden assets, or at least eliminating the chance that they exist, is essential for you to receive fair treatment when your marital assets are divided. Spouses usually hide assets in four ways:
- Denying that they exist
- Claiming that they were lost
- Creating false debt
- Transferring assets to third parties
Tax returns can help you spot red flags
While proving that your spouse is hiding assets can be challenging, there is usually a paper trail involved if you look deeply enough. These tax forms can help identify the existence of unreported marital assets:
- Itemized deductions: Schedule A can uncover sources of income or other assets that aren’t disclosed in a spouse’s property disclosure.
- Interest and dividends: Schedule B identifies assets that produce interest income and dividend distributions. Comparing this to your inventory can reveal undisclosed marital property.
- Profit or loss from business: Schedule C can include a depreciation schedule on hidden assets bought by a company related to your spouse.
- Capital gains and losses: Schedule D includes profits and deficits from assets, such as real estate and stocks and bonds. Like Schedule B, it can identify new assets or those not previously disclosed.
- Supplemental income and loss: Schedule E can reveal hidden assets, such as rental properties, partnerships and royalties.
Demand a complete accounting of assets
The end of a marriage can be viewed as the end of a business partnership, where each party has a stake in all the property that resulted during their time together. Checking other common hiding places, such as safe deposit boxes, home safes and filing cabinets can reveal the existence of other property.
The best practice is to take an inventory of all assets and documents in you and your spouse’s names before seeking divorce as it’s not uncommon for property to disappear once the process begins. Minnesota family law attorneys have extensive experience finding hidden assets.