Finding Hidden Assets in a Texas Divorce

Posted Apr 4, 2019 by Mary E. Ramos | Business Owner, CEO's or C-Suite Executives, Divorce, High Net Worth

Hidden Assets in a Texas Divorce

Whenever a person is going through a divorce, it is often their main goal to obtain the best property division possible. This can help the healing process and set that person up for success in the next chapter of their life. Unfortunately, many people find that while going through a Texas divorce, their spouse may have been hiding assets throughout their marriage or are attempting to hide assets now that a divorce is pending.

It is vital to find an experienced family law attorney licensed in Texas who has a background in successfully finding hidden assets and getting the best property award for their client. The Ramos Law Group and its team of legal specialists are skilled at knowing what to look for and identifying hidden assets. What considerations are there when thinking about hidden assets in a Texas divorce?

First, a quick refresher on community property. As Texas is a community property state, any and all assets that were earned during the duration of the marriage are subject to a just and right division in a divorce. This does not include any items that are separate property, such as items owned prior to marriage or items received through a gift or inheritance. This article is assuming any “hidden assets” are community property and should be divided by a divorce court.

Discovery and Disclosures

There are a couple ways the parties are required to disclose assets in a divorce proceeding:

1. Local Disclosures – For example, the Harris County family court system requires that parties disclose paychecks, tax returns, bank statements, and a sworn inventory and appraisement by a certain date. A sworn inventory and appraisement is a notarized/verified document that is supposed to contain an accounting of ALL property, including all assets and debts, with supporting documents showing current statements. Should the divorce matter go to trial, the trial judge will rely on the parties’ inventories when making a final property division.

2. Written Discovery – The discovery process is where a party sends the other party written requests for tangible documents. These requests can go back to the date of marriage (which is when the community property would begin accruing) and can cover paychecks, bank statements, retirement statements, PayPal/Venmo histories, credit card statements, HSA accounts, stocks, bonds, etc. Any type of property or account history may be requested.

Using the documents received from either disclosures or discovery, a competent family law attorney is able to pinpoint any discrepancies or suspicious transactions that may point to hidden assets. For example, if a party is getting cash advance on a credit card that can be detected by looking at credit card statements. Or if paychecks show automatic deposits being made to multiple bank accounts. In this technological world where everything is traced, it is becoming exceedingly difficult to hide property and the tools discussed above are often used to find any hidden or undisclosed assets.

Forensic Accounting

But what if your spouse is smarter than the average spouse and it appears they have successfully hidden community assets? If that is the case, then your legal team can hire a forensic accountant. This is a CPA or accountant who specializes in reviewing accounts and financial documents to pinpoint suspicious activity or trace the whereabouts of missing funds. Forensic accounts are well-versed in tracing items like offshore accounts or cryptocurrency.

A forensic accountant is also helpful in determining a spouse’s actual income. Often a spouse will attempt to deflate their actual income to help reduce their child support or spousal support obligations. A forensic account will review their paychecks, tax returns, bonus structures, compensation packages, and any other documents evidencing income and actually compare to see if their stated income is accurate. This method is especially helpful when dealing with self-employed spouses who can commingle their personal and business expenditures to show a reduced income.

What if Hidden Assets Are Discovered?

The Court has several methods of dividing community property and if a spouse is determined to have hidden assets or attempted to defraud the community by hiding assets, the Court may do any of the following:

• Awarding a spouse all of the previously hidden assets (or awarding the innocent spouse any nondisclosed assets not specifically awarded in the decree);
• Finding the sneaky spouse in contempt of court and awarding attorney fees to the innocent spouse.

There is a statute of limitation of two years on any assets discovered after the divorce has been finalized. So if your divorce was recent and you discover that assets existed your spouse did not disclose and were not divided in the divorce, it is imperative you contact a family law attorney to assist you in pursuing claim to those assets even if the divorce has already been finalized.

Time is of the Essence

While there are several helpful tools in tracking undisclosed or hidden assets, it is still important to contact an experienced family law attorney if you become aware that your spouse (or soon to be ex-spouse) is hiding assets. Cash and valuables can disappear and be difficult to recover, even if the existence can be proven). If you are considering a divorce and believe assets may disappear or be hidden, it’s best to begin the search and tracing process sooner rather than later.

The Ramos Law Group, PLLC and its legal team have handled many cases that dealt with hidden assets and have the resources available to help you if you believe your spouse has hidden community property.

Last Updated on February 8, 2023 by Mary E. Ramos

Mary E. Ramos

Mary E. Ramos is Board Certified in Family Law by the Texas Board of Legal Specialization. She is recognized and respected throughout the Houston legal community for dedication in effectively representing clients’ rights and interests. Mary understands the emotional side of divorce and brings a special compassion to each and every case.