What to Do If Hidden Assets Are Found After Divorce Is Finalized?
Full financial disclosure is mandatory in divorce. Sometimes, a spouse may attempt to hide assets. They may try to conceal bank accounts, underreport income, hide money, or make “transfers” to friends or family.
There are legal mechanisms that can be used to uncover concealed property in divorce. Importantly, if you discover hidden assets after your divorce has already been finalized, there may be certain steps you can take to remedy the situation.
How Are Hidden Assets Discovered in Divorce?
North Dakota follows the doctrine of equitable distribution in dividing a couple’s marital assets in divorce.In order to divide property equitably and properly, all assets in the marital estate must be disclosed during the divorce proceedings. All assets and debts must be accounted for, regardless of their source, sole or joint ownership, and regardless of whether an asset was acquired before the marriage or inherited before, during, or after the marriage.
Tools your divorce attorney may use to formally compel or require disclosure include:
- Depositions — Depositions are a formal proceeding, allowing an attorney to ask your spouse questions about their finances under oath. Depositions can take place via reliable electronic means, such as Zoom, or in-person. An attorney can inquire about any topic related to the marital estate, including but not limited to their assets, debts, business interests, or unusual withdrawals.
- Interrogatories — Interrogatories are written questions that require sworn answers. They can be used to ask your spouse about their property, debts, any financial transactions, or any other topic pertaining to the divorce.
- Requests for admission — Requests for admission are written requests, requiring sworn answers, that can be used to get your spouse to admit or deny specific facts about asset ownership.
- Inspection demands — Inspection demands can request access to property owned by your spouse, such as a safe deposit box. If your spouse refuses to comply with the inspection demand, there are court mechanisms for enforcement.
- Requests for Production of Documents — Requests for Production of Documents are written demands for documents pertaining to the marital estate (or other divorce-related matters). Documents that can be requested include financial records, bank statements, tax returns, paystubs, retirement account statements, property appraisals, or any other relevant financial information. These documents can be reviewed for irregularities, inconsistencies, unknown information, or just to get a general sense of the parties’ finances.
- Subpoenas — If your spouse refuses to comply with formal written discovery requests, subpoenas may be used to obtain the information from a third party, such as a bank.
In high asset divorce cases, your lawyer may deem it necessary and appropriate to bring in forensic accountants or financial experts to conduct an in-depth review and trace concealed or transferred assets. Experts such as tax professionals may also be required.
How Can You Tell if Your Spouse is Hiding Assets?
It can be difficult to determine whether your spouse is hiding assets in divorce. However, there are a few red flags to look out for:
- Unusual spending patterns
- Evidence of generous gifting
- Overpaying credit card debts
- Unexplained cash withdrawals or cashed checks
- Secretive behavior with financial documents and failures or refusals to fully, accurately disclose financial documents
- Unexplained dips in income from a business owned by your spouse
- New interest in digital currencies
- Offshore investments
If you notice any of these behaviors, inform your divorce attorney right away to start an investigation. Early action is key to preserving your rights and protecting your share of the marital estate.
What are the Consequences of Hiding Assets in Divorce?
A spouse who hides assets or conceals property in divorce may face sanctions issued by your judge, or may face a contempt of court finding. They can be required to pay your attorney’s fees incurred in any such enforcement proceeding or incurred as a result of their delay or failures to produce documents. . It can also result in a larger portion of the marital estate being awarded to the innocent spouse as compensation.
What Can You Do if You Find Hidden Assets After Divorce?
Although divorce judgments are final and binding, you might be able to reopen your case. However, this is only permitted under certain, very limited circumstances and very short, limited time frames after your divorce is final. For instance, if you can show that your spouse engaged in fraud, you may have grounds to file a Motion. However, there are usually also very limited timeframes in which these issues can be revisited.
Contact an Experienced North Dakota Divorce Attorney
If you are going through a divorce, all assets must be uncovered to ensure property is properly accounted for and divided fairly. If you believe your spouse is concealing assets during or after a divorce, a knowledgeable attorney can help.
If you are facing divorce, we welcome you to contact us online or by calling (701) 401-9423 to learn how we can assist you.
