FAMILY LAW ARTICLES

How To Discover Hidden Assets In A Divorce Case

Are you entangled in a divorce case, suspecting hidden assets, or perhaps wondering how to safeguard your assets? Welcome to a comprehensive guide on “How To Discover Hidden Assets In A Divorce Case” by Benjamin Vojtik, an experienced attorney at Hartley Lamas Et Al.

This video focuses on the intricate process of how to find hidden assets in divorce cases, a common issue that arises during divorce proceedings. It provides insightful divorce legal advice, including identifying and tracing financial transactions, helping you understand the gravity of asset division in a divorce.

Get a thorough evaluation of your divorce case from our experienced divorce lawyers. If you have any further queries to discuss with our certified attorneys, or seek legal counsel about a family law matter, contact Hartley Lamas Et Al. today at 833-647-2377.

Transcript:

Are you going through a divorce and are you concerned that the other party is hiding assets? Or maybe you are that other party and are actually trying to hide assets going into divorce? Well, this video is for you.

It is really important for you to know that all of that stuff is discoverable. A qualified attorney that’s good at looking through documents will be able to find those assets.

Hi, I am Benjamin Vojtik. I’ve been an attorney here at Hartley Lamas Et Al since 2018. Employed here since 2010.

Finding Hidden Assets in a Divorce

So in today’s world, there really is a record of everything. Everything is traceable. Everything’s done electronically. More often than not, even paychecks are deposited via direct deposit. So, and if that changes, it’s pretty simple and easy to go find where that went. You can subpoena the employer, you can do a request for production where they provide the back of the paystubs, so you can see exactly what accounts that money went into.

If money’s being funneled off, you can see transfers. You can see if there’s money being withheld to go into a brokerage account or a retirement account. You can get that information directly from the employer and those paystubs. The same way, if you’re trying to hide it or siphon it away from a bank, you can take a look at the bank statements and look at the transfers.

We can even see how you pay the bills. If the monthly bills aren’t aligning with your monthly income, then we can figure out what’s missing, what’s supplementing it. Where is your credit card bill being paid from? Where is your mortgage being paid from? What’s going on with the Venmo account? PayPal deposits where everything’s going. All of this is easily discoverable and there are a number of different ways to do so.

Formal Discovery

There’s formal discovery that we can serve on the other party, that’s Demand for Production, Request for Admission, Form Interrogatories, and all of that can be compelled by the court.

Subpoenas

And there’s also subpoenas. We can subpoena employers. We can subpoena banks, we can subpoena crypto exchanges. So we would even be able to see what was purchased. We’d be able to tell what cryptocurrency was purchased with the money that came from the bank. And then based on that purchase, even if we don’t necessarily know where it went, we can determine the reasonable rate of return on that investment and get the other party charged with that amount. Maybe even get us a court order to factor in the increased rate of return each year.

Tax Returns

So there are a number of ways to find assets. There’s even tax returns. A person has to declare any interest and accounts held overseas on their tax returns. And one of the bigger issues is that if they’re lying on their tax returns, if it’s something that’s being held overseas, then that’s a federal felony under the Patriot Act. So that’s not your IRS, that’s Homeland Security looking at you for severe punishment and fines.

Cryptocurrency

With cryptocurrency, it’s also, because of a recent ruling, LBRY vs SCC, it’s going to be governed under securities exchange law of the SCC. So there’s even more reporting that’s being involved with those assets.

Precious Metals

In regards to, say, precious metals, Paypal and eBay, they’ve got special tags on certain collectible items that would be items of investment or items of value, such as little pieces of gold. So we’d even be able to see, to the extent that you were purchasing precious metals to try to hide.

Punishment for Hiding Assets

All of this is discoverable, and the punishment for hiding these assets is huge. Family Code Section 721 establishes that the parties are required to engage with each other on good faith and fair dealing. So again, breaching this fiduciary duty set forth by statute has severe punishments. Up to 100% of that asset could be awarded to the other party if it was confirmed that they were trying to hide it.

Again, you’d also be looking at sanctions. The other party could be paying your attorney’s fees if you were actually able to prove that they were hiding these assets and then they lose the entire asset on top of it.

No Statute of Limitations on Division of Property

Even further, there is no statute of limitations on the division of this property. So since about 1995, the undivided community assets in a family law proceeding, the court has indefinite jurisdiction over those assets. So even if you get through the divorce, you get through judgments, without anybody finding those assets, that’s still something that’s going to be hanging over your head indefinitely.

If that person sees you driving around in a nice car. Well, how did that person get that car? How are they affording all of those things? Especially in child support cases or spousal support cases, so often these orders come out of a come out of divorce proceedings.

Well, that means your finances are forever discoverable by the other party, up until termination of support. So you could be looking at 18 years where they can discover this hidden asset, this hidden source of income, this hidden retirement account, and then you could be looking at sanctions on top of that and losing 100% of that asset.

There’s even case law out of California when one party wins the lottery, putting a dollar into a pool, and then files for divorce the next day and she tried to hide the fact that she won the lottery with a community dollar. The court found that that was community property that was put into that pot and awarded the entire amount to the husband because the wife tried to hide that asset by trying to hide the source of funds used.

Losing the Asset and Attorney’s Fees

So really, this isn’t something that is—the penalty is severe for trying to hide these assets. You’re looking at losing the assets and attorney’s fees. An attorney’s job isn’t to hide the ball. An attorney’s job is to run with the ball we have. So an attorney can’t commit a fraud on the court. The same way, an attorney isn’t going to be a co-conspirator in hiding overseas funds under the Patriot Act. That’s just not something that a wise attorney would do. And that likely isn’t the attorney that you would want representing you on your case.

The attorney that you want representing you on your case is the attorney that can find these assets. The attorney that knows the legal arguments to make about the character of those assets and is going to be upfront with the court because you want to get in front of all of this. If there’s a good argument for separate property, then that’s what the attorney should be making.

If that wife, if she wanted to set forth an argument about trying to change the date of separation or something along those lines, that would have been a much more effective and beneficial argument for her than what resulted in her trying to hide those assets.

This is where you really need to be upfront with your attorney, even if they come into the case after you’ve already been trying to hide something.

Proving Up Assets That Were Not Disclosed

But in regards to proving up how these items were intentionally not disclosed, how they were trying to hide them for their own benefit, that’s where you have disclosure. A person has to disclose all of their assets and income to the other party and then file a document under penalty of perjury saying that they did so with the court. And then you have discovery when you know that they’re hiding something, you know where it is and you can prove it, serve some discovery to just feel it up.

And then if they specifically don’t respond or say that those assets don’t exist in discovery, then you can prove it up. You can prove it up with subpoenas. You can subpoena everything. You can subpoena the banks, you can subpoena the cryptocurrency exchanges. So you can absolutely prove up their refusal to disclose these assets.

Legal Help to Find Hidden Assets in a Divorce

I hope this was helpful. I hope this was enlightening. And if you are in one of these situations, whether you were thinking about trying to hide assets, if you already have and are trying to look for a way out of it, or if you’re looking to find the other parties’ assets, you really should contact an attorney. So I hope this has been helpful.