Divorce: Discovery and Division of Hidden, Forgotten, Unrecognized, or Overlooked Assets

Description

In a divorce, both spouses must affirmatively disclose all assets, income, and debt so that the marital property can be equitably divided. Sometimes one spouse hides assets or misrepresents the value of marital property in multiple ways and may have planned the divorce for some time.

Assets are generally secreted away, either by putting them into third parties' hands or by falsifying records. The exact methods of doing so are limited only by the spouse's creativity, which may involve unwitting third parties or converting cash into fungible assets hiding in plain sight. Looking but not finding undisclosed assets--whether depleted, never existed, or well secreted away--can become a quest that prevents the parties from moving on and have lasting consequences.

Locating unreported income and unknown assets is a difficult and costly endeavor, and the expense of investigation and recovery must always be weighed against the potential benefit. A forensic accountant can uncover cleverly concealed assets, but it is an excruciating and long process. If assets are found, they may be consumed with costs.

A spouse can also often overlook valuable assets just because the spouse or the attorney is unfamiliar with the asset. Collectibles, mineral interests, intellectual property and cryptocurrency are just a few examples of areas where a party can minimize or hide value simply because their spouse is unfamiliar with the asset. It is important that attorney’s familiarize themselves with these uncommon types of assets in order to conduct discovery and properly counsel their clients on such issues.

Listen as this panel explores how to identify the badges of fraud in the divorce, when to engage a forensic accountant, and best practices for managing the costs associated with such endeavors.