Divorce can be a complicated and emotionally charged process, especially when one spouse primarily handles all of the finances during the marriage and the other spouse has limited knowledge or trust in the financially savvy spouse. One common issue that arises in these situations is the suspicion that one spouse is hiding or diverting assets.
If you are concerned that your spouse is hiding or has hidden assets, there are steps you can take to uncover the truth.
The experienced attorneys at Brousseau Naftis & Massingill, P.C. have represented clients in family law matters for decades. For more information, contact us today for a no-obligation consultation.
Finding the Assets While the Divorce Is in Process
The first step is to conduct extensive discovery directly from your spouse for all bank statements from all bank accounts in his or her name—including investment and retirement accounts—and from entities owned by your spouse.
In some cases, it may be necessary to retain a forensic accountant to help uncover any hidden assets. The accountant can review financial records and look for any inconsistencies or red flags, such as large or frequent transfers of funds to unknown accounts.
You can also serve subpoenas on financial institutions to request these records. Since the other spouse is a party to the case, the financial institutions can provide these documents without the other spouse’s authorization. This may help ensure that all financial information is accounted for during the divorce process.
What About After the Divorce?
If, even after you take these steps to identify hidden assets, you find out after the divorce decree was signed that your spouse did successfully conceal funds or property, it is important to understand your rights and options.
The first step is to determine whether your former spouse acquired the asset during marriage. In a situation where there is no prenuptial agreement, the asset will be presumed to be community property as long as it was not acquired by the spouse via gift or inheritance. If the asset is community property, a Court can still divide it even after the decree is entered. However, that asset is no longer characterized as community property, and instead, the two former spouses co-own the property as tenants in common.
Texas Family Code or Texas Property Code?
To divide the asset, there are two routes a former spouse can take. First, the former spouse can still seek a just and right division of the asset under the Texas Family Code. However, a just and right division does not always mean 50/50. Additionally, an ex-spouse cannot bring a claim under the Texas Family Code more than two years after “a former spouse unequivocally repudiates” the other ex-spouse’s interest in the asset.
The second option is under the Texas Property Code. On June 17, 2022, the Texas Supreme Court confirmed that an ex-spouse can seek a partition of the undivided asset under the Property Code, which presumes an even split of the asset. The former spouse will also have the right to a jury trial relating to a partition of the undivided property. Additionally, while there is typically no statute of limitations for a partition claim, depending on when the ex-spouse reasonably could have discovered the undisclosed asset or how long the other ex-spouse had possession of the concealed asset, some defenses could apply to bar the ex-spouse’s claim.
Act on Your Suspicions Sooner Rather Than Later
It is always better to be prudent in conducting discovery during the divorce process and ensure that all financial documents are carefully requested and reviewed. Post-divorce litigation can be costly, and it further prolongs an emotionally difficult process.
Retaining an attorney who understands the complicated nature of high-asset divorces can help you ultimately confirm that all assets are disclosed, and that you receive your fair share of the community estate at the conclusion of the divorce.
