Divorce and Financial Disclosure: Is Your Spouse Hiding Assets?

Thursday, June 6, 2013 | 11:16 am

They say you never really know your spouse until you divorce him/her. Divorce is one of the most vulnerable times in anyone’s life – a process you hope to go as smoothly and amicably as possible. But what happens when your gut tells you there’s more than meets the eye, and that it’s possible that your soon-to-be ex-spouse is hiding assets from the divorce disclosure?

During a divorce, pursuant to the Family Code, both parties are required to exchange mutual declaration of disclosures, containing that party’s current representation regarding their assets and debts, within 90 days from the time of filing of the action. This disclosure packet requires completed forms, various attachments, and current tax returns. It is essentially a paper trail of each party’s financial life, from real property to investments to insurance policies and more. If one party feels it is incomplete, there are various legal steps and tools to further pursue hidden assets or documents not presented in the initial disclosure.

1. Interrogatories – An interrogatory is a document with pointed questions sent to the opposing counsel/party. There is a set of typical family law questions provided for use by the Judicial Council; however, if those questions are not specifically tailored enough or are lacking in information, further customized interrogatories can be submitted to opposing counsel, as well as requests for documents, with a 30-day turnaround.

2. Motion to Compel – A motion to compel asks the court to grant a request ordering a party to produce information. If counsel is not getting cooperation from the opposing party, or documents that exist were incomplete or counsel received evasive answers, this can be a powerful tool to obtain said information. A party can also request attorney’s fees and sanctions for having to go through the process of filing a motion.

3. Deposition – A deposition is a legal examination of the opposing party taken under penalty of perjury, where counsel can ask any and all questions which may lead to admissible evidence in the case to help expedite the disclosure of missing information.

4. Special Interrogatories – A special interrogatory allows counsel to draft and submit their own personalized set of questions to the opposing party. This is another form of written interrogatory, as described above, in No.1.

5. Requests for Admission – A set of statements from the counsel presented in a way that requires the opposing party to admit or deny statements or allegations. These can be used to “pin down” a party on a certain factual or legal issue and can later be used to impeach a party at the time of further hearing or trial in the matter.

6. Notice to Produce – Notice to produce is a written request asking the opposing counsel to produce or submit specific documents.

7. Forensic Accounting – When a business, separate property claims, or more complex financial issues are involved in a divorce, a forensic accountant can be hired to request and review documents, and search specifically for phantom income taxes and hidden assets.

8. Subpoena to a third party source – A specific request to the third party holder of relevant document can be made by counsel. As long as the subpoena is drafted and served properly, that institution will be legally obligated to produce all financial statements and documents.

With time and patience, your attorney can unearth every stone using several tools provided to them under California Family Law.

It is important to trust your gut. I have had several clients who had sneaking suspicions that there were more assets out there that they were not aware of in detail. And in almost every case, those suspicions were true. Therefore, it makes sense to ensure you complete your due diligence and use the aforementioned discovery tools to your advantage. Fortunately, however, if you later discover an asset that was undisclosed, a skilled family law attorney can assist you in setting aside the Dissolution Judgment in order to properly divide that asset.

Kayla Horacek, Partner, Law Offices of Donald P. Schweitzer is a Certified Family Law Specialist and accredited Minor’s Counsel. She has extensive experience in business evaluations, complex property division and support issues, especially pertaining to high asset clients. In addition to her certification as a Family Law Specialist, Ms. Horacek was formerly a behavioral technician for children with autism—a combination that provides her with a deeper understanding for legal issues involving a special needs child.

 

 

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