Asset and debt division can be a source of heated debates and bitter disputes. Many spouses will go so far as to hide assets or shroud them in secrecy to prevent this property from being identified, valued and divided in a divorce. Is it possible to uncover these hidden assets?
The approach is generally two-pronged – either you are working to uncover hidden assets, or you are eliminating the possibility that hidden assets exist. Individuals will likely attempt to hide assets in one of four ways:
- Denying the asset exists
- Transferring the asset to a third party
- Claiming the asset was lost
- Creating false debt
Your divorce lawyer will use numerous means to uncover these assets. Depending on the complexity of your finances, they might employ the use of data mining experts and private investigators. A common source of information and good investigatory step includes revisiting past tax returns.
Where do I look on a tax return?
The more complex your finances, the more complex the tax return. From owning a business to owning several properties to owning numerous investments, the government demands accuracy to avoid severe penalties. There are a multitude of places to look on a tax return to possibly uncover hidden assets, including:
- Schedule A – Itemized Deductions: This would be a good place to uncover the existence of an undisclosed property. Your spouse might have deducted property taxes for a property you were unaware of.
- Schedule C – Profit or Loss from Business: Your spouse might have completed a worksheet to show depreciation of assets purchased by a related business entity.
- Schedule E – Supplemental Income and Loss: Your spouse might have attempted to hide income or create false debt. Income or losses from rental property, royalties and partnerships can all point to the existence of hidden assets.
Investigatory acumen aside, it might also be a good idea to perform a physical inventory. Examine your property for a hidden safe or take the time to visit your bank to look in the safe deposit box. This might be a practical solution to your problem. Reviewing mortgage closing documents or bank paperwork can review a wealth of data. Don’t hesitate to dig into files you might not have looked at in years.