Finding yourself in a position where your spouse is hiding assets or income from you during a divorce can be one of the most frustrating aspects of a case. On the one hand, nobody knows your spouse, their habits, their work history, and everything that goes with that better than you do. You know what sort of clothes your spouse wears, the car he drives, and other elements of his life. In short, even if you don't know exactly what your spouse earns each year, you know the lifestyle he leads. Income and lifestyle have a direct link.
On the other hand, you may also be going through a divorce where he is attempting to argue that he earns substantially less than his lifestyle would indicate. All the nice clothes, the fancy trips you’ve gone on, the meals out, etc. must have been an illusion because he is now arguing to a family court judge that his income is minimal and trending down. This has caught you by surprise, but then again, nothing surprises you about your spouse at this stage of your life. All you know is that you need to get to the bottom of this.
Your spouse’s income and assets are not only important when it comes to dividing marital property in a Texas divorce, but it is also important for purposes of assigning child support and spousal support. These forms of support are based on the income of your spouse. The greater his income, the more he pays in support. The less he earns the fewer dollars go to you for child support or spousal support. That much is simple. So, if your spouse can convince a judge that he earns less than he does that means less property and assets go to you for marital property division and fewer dollars go to you for child and medical support. This is a subject that you need to get right.
You may also be approaching this subject as a spouse who is tempted to try and hide income or assets from your spouse. You could have a million reasons or justifications for seeking to do this. One of your reasons may be that you think that your spouse is going to get preferential treatment from the judge for any reason under the sun. As a result, you feel justified in wanting to hide income and assets so that you are not on the hook for as much child support. You also don’t want your spouse to get the benefit of the doubt when it comes to dividing up your marital property.
This is the backdrop for today’s blog post from the Law Office of Bryan Fagan. We are going to discuss what you can do to help look for hidden assets or income of your spouse. The other side of the coin is that if you are considering hiding income or assets in your divorce, we are also going to go through the reasons why this is not a wise idea. No matter what your vantage point will be in the divorce we hope that you will contact the Law Office of Bryan Fagan with any questions you have about this or any area of Texas divorce law.
Even though it may feel like you and your spouse are already divorced, until the judge has signed off on your Final Decree of Divorce the case is not done. You are still married and as a result, there is certain behavior that is not tolerated when it comes to you and your spouse. You need to be honest with one another about your finances and the status of your finances during the divorce. This is especially important when you are trying to divide up your community property in the divorce. There is ample opportunity to lie or hide assets in a divorce and the case relies upon both of you being honest and upfront with one another.
When you find yourself in a position where you believe your spouse is lying about their income or hiding assets you have some options to pursue. Above all else, you should do something about this belief that you have. The last thing that you want to do is not pursue your suspicion that your spouse is hiding assets. What can end up happening is that the property division outcomes in your case become set in stone because this area of your divorce is extremely difficult to modify in the future. You can attempt to appeal the divorce outcome, but this costs money and takes time. It is much more effective and efficient for you to pursue the lies and attempted cover-up while the divorce is ongoing.
On the other hand, if you are thinking about hiding assets from your spouse know that judges and attorneys are adept at figuring out what is happening. When you hide assets, you are making life more difficult for your spouse in the short-term but you are going to make life more difficult for you in the future. For one, if your spouse can figure out that the cheating is going on she will alert her attorney and then that attorney is going to start digging into your situation. This will cost your spouse money. However, once the hiding of assets or income has been discovered you will be ordered, most likely, to pay her attorney’s fees. You will also likely receive less in the community property division than you would have had you not chosen to try to hide assets from your spouse.
Sometimes when a person attempts to hide assets or income in a divorce it can be because of feeling like he or she is owed something or is getting a bad break in the property division portion of their case. This is a difficult feeling to overcome in a lot of cases. If you were the spouse who earned the lion's share of the income for your family, the community property laws of Texas can seem unfair. Sharing property equitably with your spouse may not seem like it fair considering you are the one who stepped out of the house each day to earn an income while your spouse did not contribute monetarily to the family.
While this is an understandable concern on many levels here is where the community property laws of Texas make sense in how they treat spousal income as community property. Even though your spouse may not have left the home to work she still contributes to the finances of your family. Keeping the house in order and maintaining everything saves you money. Any homeowner who “kicks the can” and does not take care of their home will find that instead of paying regular maintenance costs, there can be very high repair costs that come up randomly. So, your spouse staying home and paying attention to the small details of your family can make a huge difference for you all from a financial standpoint.
If you all have kids, then there are obvious financial benefits to your spouse staying home and not working. Childcare costs can be extremely high and in many cases, it does not make sense for a spouse to work outside the home unless their income is high enough to not only pay for child care but to make the effort of work worth it. If your spouse stays home and cares for the children then you can substitute childcare costs, nanny costs, and cooking costs into what she saves your family. All in all, it is not fair to simply say that because your spouse does not work outside the home she does not contribute to the finances of your family.
How can hidden assets be looked for
Let’s look at the situation from the perspective of you as a spouse who has no control and little knowledge of your family finances. You buy the groceries and shop for clothes, but it isn’t like you ever look at the checking account online to see how much money you have in the account. The way you and your spouse work through these issues is that you do the shopping, and your spouse does the earning. For many years this was not an issue. You never had to worry about money being in your account or food not being on the table each week. However, now that you are going through a divorce you have started to realize that this arrangement puts you in a tough situation.
Not knowing the family finances hurts you in the sense that you have no idea how much money there is to hire a lawyer and even proceed with a divorce. This is what leads many spouses to stay married longer than they otherwise would out of a well-founded concern that what lies on the other side of the divorce may be worse than what they are experiencing in the marriage. Not knowing anything about your family finances means not being able to see your spouse moving money around to pay for an attorney and not being able to see how much money is available for you to hire a lawyer.
Budgets end to constrict in a divorce. People spend less time working because there are obligations for divorce. Stress can cause people to let out their energy through things like shopping online, going to stores, and even making large purchases like vehicles. These types of shopping ventures are done in response to the stress, heartache, and sadness that come with a divorce. Whatever can be done to cover up the emotions of the divorce is something that many people will attempt to do via a credit card. That the good feelings associated with these shopping trips are only temporary does not enter the mind of these individuals. If your spouse is behaving in this way you would have no way of knowing if you are not someone who keeps a close eye on the family finances.
Sometimes your spouse may even be engaged in an extramarital affair without you knowing anything about it. If you were someone who had access to the family checking account you may have been able to see money being moved around and spent on gifts, hotels, and other luxuries for his significant other. While this may be an unpleasant reality to come face to face with it is better to know about the cheating than to be blissfully unaware and then to suffer the financial consequences. What can end up happening is that your spouse can get away with wasting community assets on a paramour while you end up with less in the property division of your case than you otherwise would have.
From our vantage point with the Law Office of Bryan Fagan, it is more important than ever that you be aggressive when it comes to finding out about bad financial dealings and how they can impact you in a divorce. Not having access to the financial matters of you can prove to be a major mistake in your marriage even if it was a decision that you and your spouse arrived at mutually. An attorney from our office can guide the search for hidden assets because we know what to look for. There are legal mechanisms that can be used to search for financial wrongdoing in a divorce. We will not waste any time in advocating for your rights. Time is of the essence in a divorce, and it can be a mistake to wait around and not act when you know that your spouse is up to something or merely that you are not in a position to hold him or her accountable.
Assuming that you are a joint account holder on bank accounts then you can start to look through your accounts once you gain access to them online. Another way to look for hidden assets or spending on the part of your spouse is to look through file cabinets, desk drawers, and places like this to find physical property, receipts, or other proof of spending that has gone on without your knowledge. You may end up finding nothing but if your spouse is hiding something in the home it is likely to be in a place like this. Make sure to take photographs of anything that you find in case your spouse takes the item or otherwise covers his tracks later. This way you will have proof of what you found.
Another location where hidden assets can be located is on the home computer. In a digital world, your spouse may have very little in the way of physical property or assets but could be very invested in digital currencies, assets, and other online-based property. If you do not know much about computers or don’t know the first place to start looking that is ok. Speaking with one of our lawyers will give you the leg up you need when it comes to uncovering hidden assets. It may be necessary for you to get an order from the judge which allows you to search the computer if it is password protected, for example.
Discovery in a Texas divorce cases
One of the best methods to take advantage of when it comes to searching for information in a divorce is through the discovery process. This is a means by which your attorney can submit questions and requests for documents to your spouse with a deadline to respond. It is common for a thirty-day deadline to apply in divorce cases in Texas. Keep in mind that having an attorney in your divorce is helpful if you plan on submitting discovery requests. Your attorney can help by asking questions that are designed to provide you with the most information when it comes to trying to unearth difficult-to-locate information.
Your spouse will likely submit requests for discovery upon you, as well. Some objections can be provided to your spouse in response to certain requests for information or documents. You would either offer an objection or provide the documents/answers that are being asked of you. If you are unfamiliar with this process (as most people would be) it is a great idea to have an experienced family law attorney by your side to advocate for you and help you when it comes to requesting or answering discovery.
Final thoughts on hidden assets in Texas divorce cases
If you suspect that your spouse is hiding assets the best step for you to take would be to act swiftly to determine whether there are property interests that are being purposefully hidden from you. The longer you wait the great an opportunity you give your spouse to further hide whatever he or she is doing from you.
Questions about the material contained in today’s blog post? Contact the Law Office of Bryan Fagan
If you have any questions about the material contained in today’s blog post, please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed family law attorneys offer free-of-charge consultations six days a week in person, over the phone, and via video. These consultations are a great way for you to learn more about the world of Texas family law as well as about how your family's circumstances may be impacted by the filing of a divorce or child custody case.