Hidden Assets in Florida Divorce

In a Florida divorce, spouses divide their property through a process called equitable distribution. They must identify all assets, liabilities, and sources of income and then characterize them as either marital or separate property. Then, the court will fairly divide the marital property. This means that each spouse must disclose his or her financial information. Property division is a complex process anyway, but when one spouse hides assets or incurs inappropriate debts, it becomes even more difficult.

Hiding Assets

There are many ways to hide assets in a divorce. A spouse may simply hide cash, bank account statements, or valuables. The spouse may intentionally disperse marital property, perhaps by transferring property to friends and relatives, so it is not subject to division in the divorce. He or she may launder money through a family business.

An “out spouse” is a spouse who, during the marriage, was not very involved in tracking the couple’s finances, while the other spouse handled the budget, bills, and income. Out spouses do not have much knowledge of or access to the couple’s financial information.

Mandatory Disclosure

In Florida, any divorcing couple must comply with mandatory disclosure requirements which require spouses to exchange certain financial information, such as bank account statements, tax returns, pay stubs, deeds, etc. Additionally, each spouse must file a financial affidavit, which lists details about each spouse’s income, expenses, assets, and debts. Mandatory disclosure and financial affidavits are very useful in figuring out if a spouse has hidden assets.

How to Find Assets

The discovery process is also key to finding hidden assets. Discovery is the process in a lawsuit in which the two parties exchange information and documents. A spouse may ask the other spouse to produce documents such as tax returns, bank account records, loan applications, etc. Depositions and interrogatories are ways to ask questions under oath. Interrogatories are written questions to which the other party must respond. In a deposition, both spouses, their attorneys, and a court reporter meet. Each side may ask questions of the other, and both sides are sworn to tell the truth. If a spouse lies, he or she can be charged with perjury.

Subpoenas may be used against banks, employers, businesses, etc. Subpoenas are requests issued by the clerk of court. A spouse may, for example, subpoena banks or other financial institutions where a spouse has an account to obtain the records of the account.

The court can compel compliance with discovery. For example, if a spouse refuses to turn over documents, the other spouse can go to court and ask the court to order the spouse to comply with the request. If the spouse or other does not comply with discovery, the court may sanction him or her.

Finally, a spouse and his or her attorney may examine the financial affidavit for inconsistencies. For instance, a financial affidavit may reveal that a spouse has underreported income as compared to the amounts listed on pay stubs, reported nonexistent expenses, or undervalued assets.

Penalties

Spouses who hide assets in a divorce face legal penalties. They may be charged with criminal or civil contempt of court. If they lied in court or under oath, perjury charges may result. They may also face fraud charges for concealing assets. These charges may result in fines or jail time.

Additionally, concealing assets may result in the court allocating more assets to the honest spouse. The dishonest spouse may have to pay court costs and the other spouse’s attorney’s fees or private investigator’s bills. Prenuptial or postnuptial agreement may be voided.

If you feel that your spouse may be hiding assets in your divorce, an experienced attorney can help you discover them and achieve a just distribution of property. Please contact West Palm Beach family law attorney William Wallshein for a free initial consultation.