What to Do When Your Spouse Hides Assets

Perhaps your spouse has made extravagant purchases or has attempted to access a new credit line. Maybe money is missing with no credible explanation.

Previously, we laid out these and other telltale signs that there may be an issue in “Could Your Spouse Be Hiding Assets?”. Once you see these signs, you should act swiftly if you believe your spouse is hiding assets.

Information is the First Step to Righting the Ship

Information is key and can be gathered in many ways – move quickly to gain information while you can.

• Make copies of account statements, loan applications, tax returns, and any other potentially relevant financial documents in your home. By law, you cannot open mail addressed solely to your spouse. You also may not have legal access to files in a locked drawer or safe.
• If a computer is not password protected, you may retrieve those files. If your spouse has shared a password with you or it is an oft-used family password, in most circumstances you can use it to access an account or device. If you have access to your spouse’s protected documents, you should consult an attorney before accessing them to ensure you are not violating any laws.
• If you cannot find the information at home, you can gather it through a request for information. If your spouse will not willingly provide the information and the court process is underway, you can send formal requests for information using the discovery process, compel production of information via a court order, or subpoena the information from third parties.
• Third parties may also assist in gathering information. Investigators, forensic accountants, or computer forensics experts may enable you to access financial information you otherwise cannot access. These same experts can also help review and analyze the information, to help trace the flow of funds and in some cases locate hidden assets.

Decisive Action Can Save You a Lot of Money

If you catch your spouse in the act of transferring assets, or better yet, before he or she takes such action, you may be able to present the issue to the court as an emergency matter. In appropriate circumstances, the Court can issue an injunction freezing the transfer of assets until a further agreement between you and your spouse or a later court order. You may also be able to call the bank and get a temporary freeze of the account to prevent a transfer.

If your spouse has used marital funds for a purpose unrelated to your family or marriage, the Court may determine he or she has dissipated marital assets. This means that the Court can hold your spouse liable to you for the funds even after they have spent the money.

In circumstances when your spouse has retitled a joint asset in his or her sole name or in the name of another entity, the Court may still consider the asset in a divorce when dividing the marital property. If your spouse has retitled an asset in the name of another person or entity, it may be possible to establish a constructive trust, to allow the court to transfer the property back to the original owner.

Determining the appropriate remedies should be based on the facts of your case and the relevant law, and acting swiftly and resolutely will greatly increase the odds of a positive result. If you believe your spouse is hiding assets, the first step is to consult a family law attorney. It could preserve and protect you and your family’s finances.

Erin Kopelman is a divorce attorney who handles cases involving domestic relations and family law, including often-complex matters where a spouse is hiding marital assets. For more information, contact Erin at elkopelman@lerchearly.com.