If you are going through a divorce, chances are that you feel many different issues pulling you in all directions. While you may have more pressing matters on your mind, such as the welfare of your children, you should not overlook the importance of asset division. Obtaining a fair settlement or court order is critical if you want to maintain financial security in the first months and years after your divorce.
When both spouses provide a full and honest disclosure of assets, this allows the couple in mediation or a judge in a litigated divorce to equally divide the property according to California law. However, what can you do if your spouse is less than honest about his or her assets?
Tax returns are a wealth of information
It is not unusual for a spouse approaching divorce to squirrel away a nest egg. After all, divorce can be expensive, and it is helpful to know you have some security. However, you may be seeing discrepancies that point to a much larger problem. Far from providing a cushion for him or herself, your spouse may have substantial assets stashed away simply to prevent you from getting them in the divorce.
Spouses who hide assets may make excuses about the discrepancies. For example, your spouse may claim to have lost the asset, perhaps through gambling, or to deny ever having the money or property. Some spouses hide assets by transferring them to a friend or relative or covering them with complicated business transactions. However, with the help of your attorney, a careful examination of past and present tax returns may lead you to those assets, for example:
- Itemized deductions on Schedule A, such as taxes on property you didn’t know your spouse owned
- Interest your spouse’s secret investments earned listed on Schedule B, or interest your joint investment should have earned but is now missing
- Profit or loss on Schedule C, showing assets your spouse may have purchased through his or her business
- Capital gains reported on Schedule D, revealing your spouse’s securities and similar assets
- Income from commercial property, partnerships or other secret ventures on Schedule E
Besides tax returns, there are other places to look for missing assets. For example, your spouse may have a safe deposit box where he or she keeps the deeds to property you do not know about. You may need the assistance of someone with special skills or resources to track down hidden assets, but it may be worth your while to obtain what you need and deserve for a secure post-divorce life.