Texas Divorce: So, Your Spouse is Hiding Money

Divorce can be turbulent, filled with emotions, and a period that strains us in many ways. One of the primary reasons sighted and granted for dissolution of marriage (divorce) in Texas is “insupportability” or no-fault (FAM§ 6.001). Still, the grounds for divorce are often much more complicated. In reality, for many folks, particularly in Texas, the decision to divorce is founded on more than just a singular cause. Instead, marriage dissolution arrives due to many contributors, as you may already know if you are currently going through or considering separating from your spouse. What can make tensions run even higher is when financial matters enter the picture of divorce. One associated challenge some individuals face in divorce proceedings is the suspicion that their spouse might hide money or other assets. Do not ignore your gut feeling if you find yourself in this position.

Navigating the process wisely and carefully is crucial to safeguarding your interests and the welfare of any children involved and ensuring a fair settlement. Here, we explore why spouses may hide assets, signs indicating such behavior, the steps you can take, and the measures available if you find yourself in such a situation. Let’s first uncover the driving forces that lead a person to try to conceal finances, the signs of this dishonest behavior, and the illegal aspect of this conduct.

Understanding the Motivations Behind Hiding Assets

The judgment to hide assets during a divorce is often driven by a desire to secure a more favorable financial outcome; sometimes greed, fear, or emotions like anger and jealousy can feed into this decision. Some spouses may attempt to retain a larger share of the marital estate, reduce alimony, skirt child support obligations, or safeguard certain assets from being divided. Understanding the motivations behind such actions is essential for appropriately handling the issue.

Signs Your Spouse Might Be Hiding Assets:

Recognizing potential signs of asset hiding is critical for protecting your rights during divorce proceedings. Some common indications can include but are not limited to:

• Spotting Financial Abnormalities and Unusual Behavior: Sudden changes in financial habits, such as large cash withdrawals or unexplained transfers, may signal an attempt to hide money.
• Complex Financial Transactions: Overly complex financial transactions or the creation of intricate ownership structures could be red flags for concealed assets.
• Postponed Invoices or Misplaced Income: Rearranging invoices or delaying the recognition of all or portions of income until after the divorce may be a tactic to influence financial outcomes. It can all sound messy, frustrating, and confusing, especially if your spouse has multiple income streams. Some spouses may work with an accountant to reallocate or rearrange their finances and portfolios, but these movements can be detected. However, a competent divorce attorney or a forensic accountant is well-versed in the tactics used to dampen the appearance of assets leading to and during divorce proceedings.
• Disparities in Disclosures: If your spouse controlled the finances during the marriage, you might discover differences in the financial disclosures provided during the divorce process. They may have previously stated different amounts of income or worth, and suddenly, you or the court are presented with figures that seem off.

Steps If You Suspect Asset Concealment

If you suspect your soon-to-be-ex is hiding assets, consider the following steps to address the situation.

• Compiling Proof: Document any suspicious financial activities, including transfers, withdrawals, or changes in spending habits. Make copies of bank statements, investment portfolios, and other relevant financial documents.
• Remaining Informed: Keep yourself informed about your own financial standing by actively participating in the discovery process. Regularly communicate with your divorce lawyer to ensure a thorough examination of your spouse’s monetary activities.
• Revisiting Tax Returns and Reviewing Financial Statements: Scrutinize tax returns and financial statements for any discrepancies or unreported income. Compare the disclosed financial information with your records to identify inconsistencies.
• Utilizing Legal Mechanisms: Have your attorney issue formal documented requests seeking the detailed financial information of your spouse. Your attorney may also recommend and guide you through additional measures like bringing in a forensic accountant, lifestyle audits, and arranging depositions to have your spouse answer detailed questions about their financial activities.

What are the legal consequences and other impacts of hiding assets during divorce?

Texas law does not take masking financial activities and hiding assets lightly. Spouses found guilty of such actions may face severe consequences. For instance, contempt of court charges may be issued when one party intentionally and repeatedly declines to reveal their finances and financial circumstances. Intentionally hiding assets can lead to contempt of court charges that end in sanctions, fines, jail time, or all of these. Concealing assets is considered a “fraud on the community,” and the court may award the hidden assets to the wronged spouse (FAM§7.009). Courts may also adjust property division to favor the innocent spouse, providing for fair and just outcomes.

Further, they may order the spouse that hid assets to cover the innocent spouse’s attorney fees and other costs related to their fraud and illegal activities. Other consequences include a loss of credibility. The court values honesty and transparency, and once a lie is discovered, your reputation in the eyes of the court can dramatically tank. Courts may reassess support obligations, like alimony and child support, only to increase the payment terms more than had the party been honest in the first place. Property division ratios can be affected, and even custody decisions may be impacted. The consequences of attempting to conceal financial circumstances are far-reaching and can be profound and severe.

Seeking Professional Divorce Lawyers for a Fair Outcome

Suspicions of asset hiding can add a layer of distress and complexity in a Texas divorce. To ensure a just resolution and protect your financial interests and future, you must not procrastinate but must take proactive measures. Schedule a confidential consultation with a seasoned Texas divorce attorney today to discuss your unique situation and take the first step toward a truly equitable and fair resolution. You do not have to face these challenges alone or settle for an unfair outcome based on dishonest disclosure of assets.

Shannon Boudreaux

Shannon L. Boudreaux is a passionate advocate for her clients, working on their behalf to help them reshape their lives, their families, and their futures. For two decades, she has helped reunite parents with their children and helped clients negotiate contentious custody disputes. Learn more here.