To help ensure an equitable property division process, it is important to uncover any hidden assets being concealed by the spouses. Divorcing spouses should know what types of common hidden assets to look for and where to look for them.
Types of potentially hidden assets
Assets to be on the lookout for that may be hidden can include:
- Business assets that are undervalued in a family-owned business;
- Foreign bank accounts;
- Bank accounts and financial instruments registered in the names of minor children;
- Delayed employment benefits including delayed salary increases, bonuses or options to purchase company stock;
- Intentionally delayed business opportunities; or
- False repayment of debt or services;
Ways assets may be hidden
There are several ways assets may be concealed during the divorce and property division process including:
- Denying the asset exists;
- Transferring the asset to a third party;
- Claiming the asset was lost; or
- Creation of false debt.
There are a variety of different red flags to watch for that may indicate that assets are being hidden. Potential red flags may be found on tax returns including itemized deductions; interest and dividends; profit or loss form a business; capital gains and losses; or supplemental income and losses. It is important to take a thorough inventory of assets. Including past tax returns, safes and safe deposit boxes may also be a location for hidden assets. Mortgage documents can also contain important information to review.
It is important to conduct an inventory of all assets and financial documents that the spouses are named on to ensure there are no hidden assets. With a full picture of the couple’s assets, they can better prioritize their property division interests during the divorce process.