Imagine you’re at your favorite coffee shop, savoring your morning latte, when you overhear a heated conversation at the next table. “Can you believe my ex tried to hide money during our divorce?” one exasperated person exclaims. Yes, it happens more often than you think! Now, before you spill your coffee in shock, let’s dive into the juicy details of hiding assets during your Texas divorce. This article is your ultimate guide to understanding how and why people hide assets, the legal consequences, and how to protect yourself. Spoiler alert: The short answer is—hiding assets can backfire big time!
So, why keep reading? We’ll unravel the mystery behind sneaky tactics like offshore accounts and secret savings, share real-life stories that sound like they’re straight out of a movie, and give you the lowdown on how to uncover hidden assets. Whether you’re sipping that latte or curled up on your couch, get ready for an engaging, eye-opening journey into the world of financial deceptions and divorce drama in Texas.
Red Flags that Your Spouse May be Hiding Assets
Potential clients and clients alike are often concerned that their spouse may be hiding assets during your Texas divorce. Some red flags to look for include:
- Refusing to share financial information
- Diverting mail
- Decrease in income
- Controlling behavior
Refusing to Share Financial Information
If your spouse does not share financial information with you, such as the amount of money in investments or bank accounts, this could indicate they are hiding assets.
For more detailed insights, check out our guide on uncovering the truth: what happens if your spouse hides assets in Texas. At the Law Office of Bryan Fagan PLLC, we can help you navigate these complex situations and ensure a fair outcome in your divorce proceedings.
Diverting Mail
If your spouse starts sending mail to another location, this is a strong indicator they might be trying to hide something, such as a secret bank account, they don’t want you to find out about.
Decrease in Income
A sudden decrease in your spouse’s income can be another red flag indicating they are diverting money elsewhere. With the ease of setting up direct deposits into multiple accounts these days, if your spouse is depositing less money into a joint account, it may mean there is money going elsewhere.
Consulting with a Texas Divorce Lawyer
If you notice any of the above signs or other behaviors that set off alarm bells, you should consult with a Texas divorce lawyer. An experienced lawyer will help you determine your rights and the steps you can take to protect yourself. Hiding assets during your Texas divorce is a serious issue that can significantly affect the outcome.
Hiding Assets
Hiding assets can take many forms, including:
- Hiding income
- Moving money to a family member or friend’s account
- Hiding money in offshore accounts
- Overpaying taxes
- Hiding money in sneaky investments
- Undervaluing business interests
Hiding Income
In one consultation, an individual mentioned they had a second job where they were compensated largely in cash. They bragged about how their spouse had very little knowledge of this income, making it easy to hide. I cautioned this individual that if discovered, a judge could severely punish them during the divorce, possibly awarding their spouse a disproportionate share of the marital property along with other sanctions.
Our office has encountered multiple instances where a spouse tried to understate their income. In one case, a self-employed individual claimed to make a certain amount per month, but their bank statements revealed deposits ten times that amount.
Moving Money to a Family Member or Friend’s Account
In another consultation, a husband asked if it was possible to hide assets by moving money into a family member or friend’s account. These questions highlight the common tactics used in hiding assets during your Texas divorce.
Seeking Legal Help
If you suspect your spouse is hiding assets, it’s crucial to seek legal advice. The Law Office of Bryan Fagan PLLC can guide you through uncovering these hidden assets and ensuring a fair divorce settlement. Certain behaviors may indicate a spouse is hiding assets, and being aware of these signs can help you protect your financial future.
Can an attorney help their client hide money from their spouse?
Hiding assets during your Texas divorce is not only unfair but also illegal. Texas attorneys have an ethical duty to not “engage in conduct involving dishonesty, fraud, deceit, or misrepresentation.” This means that your lawyer cannot help you hide assets, and if they discover you are doing so, they may be required to withdraw from representing you.
Responsibilities of Spouses
Spouses have a similar duty to their ex. During divorce proceedings, it is highly likely that each spouse will have to swear an oath disclosing all assets and debts. If one spouse hides assets, they risk severe legal consequences and the possibility of their attorney having to step down from the case.
How Private Investigators Can Uncover Hidden Assets in Divorce
To ensure a fair and just process, private investigators can play a crucial role in uncovering hidden assets. They use various techniques to trace financial discrepancies and hidden wealth. By hiring a private investigator, you can uncover any deceitful practices and secure a fair division of assets.
At the Law Office of Bryan Fagan PLLC, we understand the complexities of hiding assets during your Texas divorce and the importance of maintaining ethical standards. Our experienced attorneys are here to guide you through every step, ensuring transparency and fairness in your divorce proceedings. If you suspect your spouse is hiding assets, let us help you uncover the truth and protect your financial future.
Hiding the money from their spouse in another person’s account?
As our previous discussion suggests, hiding money in another person’s account is not permissible during a divorce. While there are no court orders preventing a spouse from engaging in this activity prior to filing, things change once the divorce process begins.
One of the first steps his wife’s attorney will likely take is to request two years’ worth of bank statements to identify any large sums of money being moved around. If it is discovered that money has been transferred, his wife could request to be awarded 100% of the hidden funds due to fraud on the marital estate. This deceitful act would also damage his credibility with the court, casting doubt on everything he says or presents.
Hiding Money in Offshore Accounts
Hiding money in a foreign country might sound like a plot from a movie or a story about a rich celebrity, but it’s a trick you should be aware of. The biggest issue with this tactic is that even if the money is discovered, recovering it can be extremely difficult.
Foreign Accounts: Easy to Open
With today’s internet and ease of travel, setting up foreign bank accounts is incredibly easy. Many foreign banks make accessing this money simple with ATM and debit cards. Often, a spouse might not even consider that their partner could be hiding money overseas, as was the case with an ex-wife who contacted our office.
Within the last month, this ex-wife reached out to us suspecting that her former husband had hidden money in another country. He had encountered issues with the IRS and convinced her to divorce to protect her. He claimed to be giving her everything. However, after he moved abroad, she discovered that he had returned to the United States, living a lavish lifestyle that suggested he had hidden assets during their marriage.
How Do I Find out if My Spouse Has Been Hiding Money in Bitcoin?
In today’s digital age, cryptocurrencies like Bitcoin have become another avenue for hiding assets during a divorce. If you suspect your spouse might be using Bitcoin to conceal money, there are specific steps you can take to uncover this.
First, look for any unusual financial activity, such as significant withdrawals from bank accounts or investments in cryptocurrency exchanges. An attorney experienced in hiding assets during your Texas divorce can help you subpoena records from these exchanges and trace transactions.
At the Law Office of Bryan Fagan PLLC, we understand the complexities of hiding assets during your Texas divorce and are equipped to help you uncover hidden money, whether it’s in foreign accounts or cryptocurrencies like Bitcoin. Let us guide you through this challenging process and ensure a fair division of assets.
What Can be Done?
This ex-wife wanted to know what could be done. I explained the process of post-divorce discovery and the legal remedies available if we discover hidden assets. If fraud is discovered within a reasonable time, you can file a motion to set aside the Final Divorce Decree. Alternatively, if the time period for filing such a motion has expired, a separate post-divorce lawsuit can be filed to divide any undisclosed assets.
Challenges of Dividing Offshore Assets
It’s important to remember that although a court may order offshore assets to be divided between spouses, enforcing this order can be very difficult, time-consuming, and expensive. Convincing a foreign jurisdiction to obey a United States court order often presents significant challenges.
Increased Scrutiny on Foreign Accounts
While foreign accounts are easy to open, they are becoming increasingly difficult to hide. Due to concerns regarding terrorism, the United States and several foreign countries now cooperate in reporting certain information to each other. Many foreign banks send the IRS information regarding United States citizens. This makes reviewing tax returns an essential tool for detecting foreign bank accounts.
At the Law Office of Bryan Fagan PLLC, we understand the complexities involved in hiding assets in divorce: red flags, searches, and penalties. If you suspect your spouse is hiding assets, it’s crucial to take action. Look for red flags such as unusual financial behavior and conduct thorough searches to uncover hidden assets. The penalties for hiding assets can be severe, including setting aside the Final Divorce Decree and filing additional lawsuits to recover undisclosed assets.
Our experienced attorneys are here to guide you through the process, ensuring that all hidden assets are discovered and fairly divided. Don’t let hidden assets affect your divorce settlement—let us help you protect your rights and achieve a fair outcome.
Be Careful
Another thing to consider when deciding if your spouse may have hidden money oversees is what are the financial resources of the marriage. If you and your spouse are living paycheck to paycheck and you have a good handle on where the money is going, then this probably not a dirty trick your spouse is engaging in.
Unfortunately, for the husband in one of my cases his wife became convinced that her husband was hiding money offshore. In this particular case the husband was just scraping by as a music teacher. Nothing in the case would have indicated that he had engaged in this underhanded trick. The couple was severely underwater with credit card and other debts. Despite this she and her attorney went on a witch hunt with legal discovery to find the hidden assets and turned what should have been maybe a $3,500-$7,000 divorce in a $40,000 divorce.
Overpaying Taxes
In one case I had where I represented the wife the husband had tried to hide marital money by overpaying the federal income taxes. He had set it up with his employer where more money then was necessary was being taken out to paycheck for taxes.
During settlement negotiations in mediation we had settled all issues except the spouses filing taxes together and splitting any tax refund. When we suggested doing just that the husband hit the roof and said no. We pressed the issue and said that we were either willing to walk away from the agreement and proceed with going forward to trial.
After hearing that this case may be going to trial the other side relented and parties agreed to split any tax refund. We later found out what the husband had done and that the refund was $25,000.
Hiding Money in Sneaky Investments
Another tactic for trying to hide money is place it in an investment vehicle the spouse may not suspect one such investment vehicle is a children’s 529 plan.
A 529 plan is supposed to be used to help families save money for their children’s college education. These plans offer certain tax benefits as incentives to encourage parents to save.
A 529 plan is set up so that:
- The parent is the account owner and
- the child is named as beneficiary
However, 529 plan funds can be withdrawn at any time by the owner usually with tax penalties. This freedom withdraw makes them possible vehicles to hide money during a divorce.
One example of this would be to put money that normally would be divided during a divorce in a 529 and pretend that it was for the child only to withdraw it later after the divorce. This would be much like the tactic described above of overpaying taxes so you do not have to divided it you’re your spouse. You then later get that money back after the divorce.
There was concern in at least one of my cases that this tactic was being used. We solved the problem during our mediation by dividing up to similarly funded 529’s between the two spouses. They were then made constructive trustees of the funds that were only to be used for the benefit of the child’s education.
Undervaluing Business Interests
For purposes of calculating child support it is relatively easy to calculate when a person is an employee. However, as discussed above regarding hiding income it can be more difficult when that individual is self-employed or entrepreneur. This is because an entrepreneur can more easily manipulate things within a business to show less income.
During a Texas divorce involving a business, the value of the business is often a major focus of the division of property. There are several different approaches to valuing a business. One dirty trick is to try and undervalue the business so there is less to provide. If your spouse is control of the business they are in best position know what is actually worth.
If you are not the spouse in control of the business rather than rely on your spouse as to the value of the business you may want to hire an independent business appraiser who is Accredited in Business Valuation to help you evaluate what the business is worth.
How can I find out if my spouse is hiding assets?
One way to help detect if your spouse is hiding assets is to conduct discovery. Discovery usually involves one or more of the following documents:
- Request for Disclosure;
- Request for Production; and
- Written Interrogatories;
- Requests for Admission;
- Sworn Inventory and Appraisement
- Depositions
One of the unique forms and important forms of discovery in a Texas divorce is to require spouses to prepare and file a sworn inventory and appraisement of all marital assets and debts. This inventory and appraisement will itemize all financial accounts, of the marriage.
Another helpful form of discovery is a request for production. This request forces the spouse to produce statements for financial accounts including:
- bank statements and
- other written documentation
It is often helpful to compare these statements to the inventory and appraisement. If this comparison raises questions or needs clarification. Additional discovery can be conducted including sending a request for interrogatories that asks questions or to conduct a deposition of the spouse.
If more expertise is needed an attorney can employ a forensic accountant to review the financial in a divorce to try and detect anomalies, irregularities, or hidden assets.
Conclusion:
So, picture this: you’re on the brink of finalizing your divorce, and suddenly, like a plot twist in a gripping novel, you uncover a hidden stash of assets your spouse hoped you’d never find. It’s shocking, it’s infuriating, but it’s also, unfortunately, a common reality in many Texas divorces. The good news? You’re now equipped with the knowledge to spot these dirty tricks and the steps to take if you suspect something fishy.
Think of asset hiding as a game of financial hide-and-seek. Only, in this game, honesty is always the best policy, and cheating can lead to some pretty severe consequences. With real-life examples, expert tips, and a bit of legal wisdom, you’ve got the tools to ensure a fair and just division of assets. Whether it’s spotting red flags like diverted mail or secret offshore accounts, or understanding the role of forensic accountants in unveiling hidden wealth, you’re ready to face this challenge head-on.
And remember, just like in our favorite coffee shop anecdote, transparency and honesty are the keys to a fair divorce process. So, grab another cup of your favorite brew, stay vigilant, and keep this guide handy as you navigate through the twists and turns of your Texas divorce journey. After all, knowledge is power, and in this case, it’s also your best defense against financial deception. Cheers to a fair and transparent future!
Bryan Fagan, a native of Atascocita, Texas, is a dedicated family law attorney inspired by John Grisham’s “The Pelican Brief.” He is the first lawyer in his family, which includes two adopted brothers. Bryan’s commitment to family is personal and professional; he cared for his grandmother with Alzheimer’s while completing his degree and attended the South Texas College of Law at night.
Married with three children, Bryan’s personal experiences enrich his understanding of family dynamics, which is central to his legal practice. He specializes in family law, offering innovative and efficient legal services. A certified member of the College of the State Bar of Texas, Bryan is part of an elite group of legal professionals committed to ongoing education and high-level expertise.
His legal practice covers divorce, custody disputes, property disputes, adoption, paternity, and mediation. Bryan is also experienced in drafting marital property agreements. He leads a team dedicated to complex family law cases and protecting families from false CPS allegations.
Based in Houston, Bryan is active in the Houston Family Law Sector of the Houston Bar Association and various family law groups in Texas. His deep understanding of family values and his professional dedication make him a compassionate advocate for families navigating Texas family law.
