Washington is a community property state, which means that marital property is generally split 50/50 during a divorce. An important part of this equal division is gaining a complete financial picture of the assets and debts of both spouses. Failing to fully and honestly disclose finances during divorce proceedings is illegal but more common than you might expect. If this happens in your case, there are actions you can take to discover and possibly recapture what your spouse is trying to keep hidden.
These are some of the tactics that a spouse may use to undervalue, disguise or hide assets during a divorce:
- Depositing money in an account opened under a false identity
- Placing money or valuables in a safety deposit box or storage unit
- Giving property to a relative or friend to hold in secret
- Buying items that could be easily overlooked or undervalued
- Overpaying the IRS or creditors, thereby establishing a basis for payback
- Creating phony loans or expense accounts
- Transferring property to family members, friends or business associates
- Concealing funds in a child’s financial account
- Using business accounts and contracts to shelter assets
- Requesting that an employer withhold bonuses until after the divorce is finalized
Any divorce in which the spouses are in disagreement over money is deemed contested, which opens the door to formal discovery proceedings. During this phase of the case, you have an opportunity to obtain financial and other information and documents from your spouse. This can be done by:
- Requesting records of bank, investment, securities, pension and trust accounts, along with other forms of financial holdings
- Requesting disclosure of other types of property owned, such as real estate, automobiles, jewelry, artwork, antiques and business assets
- Subpoenaing third parties and institutions to obtain documents relating to suspected holdings
- Sending interrogatories or questions in writing that must be answered under oath
- Conducting depositions, which are oral examinations under oath
However, even with the aid of a skillful divorce attorney, the discovery process can be contentious and possibly unrevealing if a spouse has secreted assets. A forensic accountant may be required to thoroughly examine all sources of information, including public records. Private investigators may also be necessary, especially if property is deposited in hidden accounts.
Fortunately, you have a powerful weapon in your arsenal: the threat of legal sanctions. A spouse who fails or refuses to divulge information about their financial assets or who otherwise delays or frustrates the litigation process can face monetary penalties, such as paying the other spouse’s attorneys’ fees or getting a reduced share during property division. If hidden assets are discovered after the divorce is final, further sanctions may be imposed to pay for the additional legal work necessary.
At Bottimore & Associates, P.L.L.C. in Tacoma, we have the experience, resources and expert relations needed to help parties uncover hidden assets in divorce proceedings. To learn more or to schedule a consultation, call us at 253-272-5653 or contact us online today.