Finding Hidden Assets in a Divorce
Indiana is a “one pot” state where the Courts divide the property and debts of the marriage on a 50-50% basis. Most Courts here require mandatory financial disclosure of assets but parties sometime attempt to hide assets so that they are not included in the divorce. It is important to do your own due diligence and discovery in your divorce to make sure that you include all of the property of the marriage.
How Assets are Hidden?
Assets can be hidden several different ways. It could be as simple as undervaluing the asset in your disclosures or as complicated denying the existence of the asset so it is something you have to go out and find. It is also possible that they could have transferred ownership of the asset to another person.
Where to find Hidden Assets?
You are going to have to do some investigating to find hidden assets. The most common way to do this is through discovery where you can request copies of documents and ask specific questions through interrogatories. Some common items that we request include:
Tax Returns. They can help you find hidden income or investments in the different schedules.
Bank statements. You can look for expensive purchases or large transfers prior to filing the divorce.
Loan Applications. Some loan applications require you to list out your assets and debts which could help uncover hidden assets.
Transfers to Friends/Family. Did they give anyone any gifts or transfer assets to family members?
Using Discovery to your Advantage
Don’t rely on your spouses’s financial declaration alone. Take some time to do the financial discovery and verify the accuracy of their information. Sometimes you may uncover something and sometimes you may not, but going through the process helps you identify the entire marital estate. And after you identify everything, it is common that you are valuing the items differently than your spouse. Discovery can help you challenge their valuations.
Penalties
If you find out there has been a failure to disclose, there are several penalties that could be imposed that could include sanctions such as an unequal distribution of martial property in your favor or the payment of attorney fees.