Getting Divorced: Is Your Ex Hiding Money?

Texas Divorce Lawyer Uncovers Hidden Assets

Video Transcript: 

Jillian French: 

So if everyone can get along and agree to exchange information with each other, that's gonna be really the best and most cost-effective way to exchange that information.

Tom Mustin: 

How do you find hidden assets when you're going through a divorce in Texas? We're gonna talk to attorney Jillian French about that on today's Ask the Lawyer. Jillian, thanks for joining us.

Jillian French: 

Thank you for having me.

Tom Mustin: 

Great to have you here. So could you briefly describe how spouses exchange information regarding assets when it comes to a divorce?

Jillian French: 

Sure, the easiest way is gonna be through some sort of informal discovery process. In Texas, we now have what's called required initial disclosures, where 30 days after the answer is filed, both spouses have a list of information that they have to send to each other, outside of that you can also send each other formal discovery requests, which can be a little bit more tedious, can be more expensive and time consuming, so if everyone can get along and agree to exchange information with each other, that's gonna be really the best and most cost-effective way to exchange that information.

Tom Mustin: 

Okay, and do you have to disclose a separate property, and is that something that spouse can decide for themselves as opposed to a community property or marital property?

Jillian French: 

Well, if they're gonna want it recognized as separate property, they're gonna wanna disclose that. In Texas, all property is going to be presumed to be community, unless you can show that it is separate. Now, if one spouse wants to acknowledge the other spouse's property is in fact separate and they just want to agree to that, that can be done. Typically though in a divorce situation, where people are no longer getting along, the response to that is gonna be, "Prove it." And it is the person that's asserting that it's separate properties burden to prove that it is in fact separate property and testimony alone is insufficient to do that.

Tom Mustin: 

Okay, and along the same lines, what if the divorce is not amicable and maybe the parties aren't even speaking to each other, and someone's trying to get information about stock options or bank accounts, that kind of thing, what can you do to get them that information?

Jillian French: 

So the discovery process that we kind of touched on earlier, the formal discovery process is usually the most common way of doing that, where you send a formal written request for information, that request then is responded to. That request often contains information like bank statements, RSUs, retirement accounts, investment accounts, things of that nature.

Tom Mustin: 

So what could a spouse do if they suspect that the other spouse is hiding assets, and what can a lawyer do about that?

Jillian French: 

This is a concern that comes up quite often actually, and it's something we're now in the age where most things are going to be direct deposits, things are gonna... Transactions are gonna be done electronically, it is much more difficult to hide the assets, even buying cryptocurrency is gonna be done through a bank account of some sort, and so you really want to get the production of the documents, you want to pay attention to the transactions that have occurred. There may even be an expert that gets hired to trace the assets and make sure that the transactions all make sense, and if there was a purchase or a transfer from one account, that there is another account that corresponds to that transaction, to that transfer of those funds or the purchase, or if you see a transfer to maybe Coinbase for cryptocurrency, that you then have that Coinbase account showing that that purchase occurred versus that purchase occurred to maybe an account that you don't have, that's in someone else's name maybe. Those are the kinds of things that you pay attention to to try to prevent hidden assets or issues with hidden assets from occurring.

Tom Mustin: 

And so what does the law say about the hiding assets, and is there any kind of punishment that can be instigated against the person who is hiding assets?

Jillian French: 

So if there is hidden assets or someone that is trying to hide assets or most often what happens is there's transfers out, somebody is saying, "I don't have that account, that account doesn't exist. I transferred it to my family, and so therefore I can't produce that account, because it's not my account." If they're doing something like that, what we most often do actually is that we just award that party that did that sort of a phantom asset equivalent to that dollar amount, and so therefore they get less of something else that's in the estate. So for example, maybe if they depleted a retirement account then and there's a house that has an equivalent amount of equity, then now the other spouse gets the house or something along those lines. Is it gonna be something where it's illegal... That's not really the road that we're going down, it's more of an equity thing that we're trying to do.

Tom Mustin: 

Okay, let me ask another hypothetical, so say the divorce is already final, and then the spouse later finds out that there's been some hidden assets, is there anything that you can do post-decree to try to get that back?

Jillian French: 

Yeah, so there actually in the Texas family code, there is a post-divorce division of undivided assets that can be filed, and basically the person upon discovering that there was an asset that existed at the time of the divorce, and it was a community asset or potential community asset can file that petition, and then they can ask the court to divide it in a just and right manner. So it's not necessarily a 50/50 division, it's not necessarily that one person gets 100% or 0%, it's gonna be a just and right division.

Tom Mustin: Okay, well, a lot of great information, Jillian. We really appreciate you joining us today, thank you so much.

Jillian French: 

No problem, thank you.

Tom Mustin: 

So that's gonna do it for this episode of Ask the Lawyer. My guest has been Jillian French. If you wanna ask Jillian about your situation, call the number you see on your screen. Thanks for watching, I'm Tom Mustin for Ask the Lawyers.

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