By Family Law Attorney Brian W. Reidy of Reidy Law Office, LLC
In divorce, it is more common than people think for one spouse to hide assets from another spouse.
By doing so, the spouse hiding the assets may be required to pay less in child support, alimony and other expenses related to the divorce. Luckily, hidden assets do not always stay hidden forever.
“There are ways to discover a spouse is hiding assets and make sure the final divorce agreement is fair to all parties,” says Brian W. Reidy of the Reidy Law Office, LLC. “You just have to know where to look, and what to look for, which is why having the help of a family lawyer is so important.”
The first place to start looking is the spouse’s paystubs. These contain a lot of information, including how much money has been diverted into a 401(k) or been withheld for taxes. If these combined amounts are grossly more than the spouse’s take-home pay, they are likely using those tools as a place to park their income, and hide it from you.
A person’s tax return will also shed significant light on a spouse’s hidden assets. Schedule B of a tax return outlines the interest and dividends a person may be earning, while Schedule D will outline all capital gains and losses.
In addition, if a Form 1099-R is included with the tax return, it means a spouse is using a retirement account to park money in, possibly until shortly after the divorce is finalized.
Both pay stubs and tax returns can be accessed during the discovery phase of a divorce. During this stage of the proceedings, both sides can request information from the other side that can help support their case in court. If one party asks the other side for this type of documentation, it must be provided to them.
In an ideal world, divorces would always be an honest and open process. Unfortunately, that is not the case. Everyone wants the terms of a divorce to be fair. Knowing how to spot hidden assets is one way to ensure they will be.