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What To Do If Your Spouse Is Hiding Assets

Let's Untie the Knot | What To Do If Your Spouse Is Hiding Assets

It is not uncommon for a spouse to conceal some of the marital assets during the divorce.  However, hiding assets, income and debt is not only unethical; it is also illegal and subject to severe penalties if discovered.  The spouse hiding the assets can be extremely manipulative and have knowledge to which the other spouse is not privy.  This combination of factors can make it very difficult for the wronged spouse to make his or her case. 

Oregon is an equitable distribution state, meaning that the court divides the assets “fairly” between the spouses.  In an equitable distribution state, the court starts with the presumption that marital assets should be divided 50/50, but allows parties to introduce evidence that they deserve a bigger share based on various contributions, such as their greater contribution to marital assets or the lesser earning potential of a spouse. 

Spouses have hidden assets in almost every imaginable way.  For example, a spouse can bury cash in the basement, transfer money to a friend or set up trusts.  Spouses who own businesses have a number of ways of hiding assets, including laundering money through the business, paying “salaries” to people who don’t even exist or waiting until after the divorce to make a particularly lucrative deal.  If your spouse has handled your personal bookkeeping during the marriage, you are what some attorneys refer to as the “out-spouse.”  This means that you don’t have the same access to financial information as your spouse does.  If you believe that your spouse is hiding assets, you will want to contact an attorney and perhaps a forensic accountant.  If you don’t believe that your spouse will disclose all the financial information in a divorce, you or your attorney will have to use the discovery process to obtain all relevant information.

The discovery process typically involves the following methods of retrieving information:

  • Document demands: your attorney can ask your spouse to produce specific documents such as tax returns, financial statements, loan applications and account records.
  • Interrogatories and requests for admission: your attorney can use these tools to compel your spouse to answer, in writing, or admit specific statements that you believe are true.
  • Inspection demands:you can ask to inspect property such as a safe deposit box or wine collection.
  • Depositions: in these testimonies made under oath, you, your spouse and your respective attorneys appear before a court reporter. Your spouse is sworn to tell the truth and must answer questions asked by your attorney. Depositions are particularly good ways to get information from a spouse. A party who lies under oath during a deposition can be charged with perjury.

The discovery process is a great way to obtain financial information because the court has the authority to compel compliance.  If your spouse violates the order, a court may punish your spouse by imposing a “sanction,” which can include a monetary fine or even a judgment against your spouse on a particular issue. 

Other ways to look for hidden assets during a divorce include:

  • Examine your tax returns: Even a spouse who is trying to hide income from you is going to think twice about it before hiding it from the IRS. Go back at least five years to look for inconsistencies in income, the presence of trusts, partnerships or real estate holdings.
  • Look at checking account statements and canceled checks: a canceled check for a purchase of which you were unaware, such as an investment property, can make a substantial difference in total assets to be divided. Checking account statements and canceled checks from accounts you didn’t even know existed are even more telling. Be sure to request all copies of financial accounts during the discovery phase of your divorce process. Also look at the history of deposits and withdrawals. This could point to a hidden asset such as a dividend producing investment.
  • Go to the courthouse: if your spouse has borrowed money from a bank or mortgage company, their loan application will be on file at the courthouse. A person fills out a loan application in anticipation of obtaining money from a bank. On that application will be a list of assets the person owns and an estimation of their value.
  • Go to the county tax assessor’s office: If money has been taken from savings accounts and used for buying real estate property, the tax assessor will have all important information on record. Any land or homes they own will be listed with an address and the assessed taxable value of the property.
Although your marriage was supposed to be based on trust and honesty, when it comes to assessing assets, don’t take your spouse’s word for it.  Do an exhaustive search of all the financial information you can get your hands on to get a full and complete sense of what you are entitled to in your divorce.
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Let’s Untie the Knot, LLC is not a law firm. It is a company providing informational products, DIY software, technology and legal document assistance. Nicole Schaefer is an attorney licensed in Oregon, but she does not provide any legal services. The independent attorneys hired through this site will have their own lawyer-client contracts and terms. Let’s Untie the Knot, LLC does not create an attorney/client relationship.

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