Before ruling on property division, divorcing couples are required to make full disclosure of all their assets and debts. This is meant to ensure that each party walks out of the marriage with their fair share of the marital property. Texas is a community property state, meaning that marital property must be divided evenly between the divorcing parties according to the state’s statute.
While this property division approach works for some couples, others may have a difficult time determining what each party should get at the end of the marriage. As a result, some spouses may attempt to hide assets from the court and their partners with the goal of gaining more from the divorce.
Common tactics spouses use to hide marital assets
Spouses may employ numerous different methods of trying to conceal assets during a divorce. Here are some of the more common tactics:
Converting cash
Once the divorce process has kicked off, some spouses may opt to convert cash into property with the goal of hiding them from the court and the other party. For instance, they may withdraw cash from the savings account and purchase clothing or other items. The goal is to let you overlook or undervalue these acquisitions during the divorce. Alternatively, some spouses may convert cash to travelers’ checks or bonds that are both difficult to trace.
Using the business to hide assets
If your spouse owns or operates a business, they could use that business to hide both personal and marital assets. They can do this by funneling personal funds into the business or redirecting business funds that should have been treated as income. For instance, they can set up a “ghost employee” and channel funds towards this employee’s salary. Once the divorce is finalized, they can reroute this money back without you or the court’s knowledge.
Going through a divorce can be emotionally and financially taxing. It does not get any better if your spouse is hiding marital assets. If you suspect that your spouse is engaging in this practice, it is important that you take proactive steps to trace the hidden assets and bring the matter to the attention of the court.