Divorce can have a devastating effect on people’s finances. Some people, therefore, try to get an advantage over the other spouse during a divorce by hiding information about assets or the assets themselves. However, doing so can lead to serious consequences. If you are concerned about hidden assets in your divorce, consider contacting an experienced family lawyer at Johnson Law Group by calling (720) 744-3513.
Property Division Rules in Colorado
Colorado is an equitable distribution state. When a couple divorces, the court will try to divide the marital property between the spouses in an equitable but not necessarily equal manner. Marital property is generally property that was acquired during the marriage. Under Colorado Revised Statutes Annotated §14-10-113, marital property does not include any property acquired after the marriage that was:
- A gift or inheritance
- Acquired in exchange for separate property or property received as a gift or inheritance
- Acquired after a decree of legal separation
- Excluded by a valid agreement between the spouses
When the court divides marital property, it considers many factors, which are outlined in Colorado Revised Statutes Annotated §14-10-113. These factors include:
- The contribution each spouse made to acquire marital property, including non-economic contributions to the marriage, such as acting as a homemaker
- The separate property of each spouse
- Each spouse’s economic circumstances as of the time the property is divided
- The desirability of awarding the family home to the custodial parent if the children will be living there the majority of the time
- Any increases or decreases in the separate property’s value of either spouse
- The depletion of separate property for marital purposes
Disclosure Requirements
According to the Colorado Rules of Civil Procedure, spouses must provide the court and each other with a “full disclosure of all marital assets or liabilities.” To fulfill this requirement, each spouse must provide the following:
- A sworn financial affidavit
- The last three years of business and personal tax returns
- Personal and business financial statements for the past three years
- Real estate documents
- Investment, retirement account, employment benefit, and bank statements
- Insurance documentation
Effect of Hiding Marital Assets
If spouses hide marital assets during a divorce, they could be subject to significant penalties. If a spouse can prove that the other spouse did not properly disclose marital property, he or she can ask the court to revise the property division order. The court might award a greater percentage and value of the marital estate to the spouse who did not hide assets. The court could also find the spouse who hid assets in contempt of court, which can result in a fine and/or jail sentence. These penalties can be imposed well after the divorce is finalized.
Signs That a Spouse May Be Hiding Marital Assets
Divorces can be emotionally charged, but a divorcing spouse can benefit from paying attention to the details. Some signs that a spouse may be hiding marital assets include the following:
- The spouse suddenly takes control of the finances
- The spouse makes expensive purchases without the other’s knowledge
- The spouse hides account statements or changes the address where statements are sent
- The spouse opens new bank or credit accounts in his or her own name without informing the other spouse
- The spouse opens a post office box and does not inform the other spouse
- The spouse overpays debts to get a refund from the creditor and they then hide from the other spouse
If you have noticed any of these signs or are otherwise concerned about hidden marital assets, a family lawyer from Johnson Law Group may be able to help. An attorney can request that all relevant financial records be provided and help fight for proper recourse if a spouse hides assets during the divorce process.
Ways of Hiding Marital Assets
Some of the many ways a spouse can hide marital assets include:
- Overstating expenses and debts
- Understating income
- Not listing an asset on necessary financial disclosures
- Signing over the property to family members or friends
- Overpaying the IRS or other creditors
- Paying fake debts to family members or others
- Hiding credit cards
- Transferring funds from a joint account to an individual account
- Putting assets in an offshore corporation or shell corporation
- Not disclosing the existence of assets or debts
- Intentionally misleading the court or the other spouse about the value of marital assets
- Making big-ticket purchases like automobiles, art, or collectibles and undervaluing them
- Intentionally delaying bonuses, stock options, or raises until after the divorce is finalized
- Diverting funds from a business
- Not disclosing restricted stock options, bonuses, or other deferred compensation
- Failing to report income on a tax return
- Hiding physical assets from the other spouse by putting them in a storage unit, a safe deposit box, or other location that the other spouse does not have access to
- Converting assets to cryptocurrency
How To Find Hidden Marital Assets
Hidden marital assets may be located by:
- Analyzing financial statements
- Reviewing income tax returns for undisclosed income and interest
- Reviewing credit card statements for high-ticket purchases
- Examining loan applications that may show undisclosed income or assets
- Reviewing business or self-employment records to identify the source of hidden assets
- Searching public records for property titled in the spouse’s name
A lawyer helps to locate hidden marital assets using the formal discovery process. Depending on the situation, this may consist of:
- Demanding that the other spouse produce specific documents, such as financial statements, account records, tax returns, business records, and loan applications
- Submitting interrogatories or requests for admission regarding assets, income, and debts
- Deposing others who may have helped the spouse hide assets
- Requesting to inspect places where hidden assets may be located
Contact a Lawyer for Help Dealing with Hidden Marital Assets
If you are concerned about hidden assets in your divorce, an experienced family lawyer may be able to help, even if your divorce has already been finalized. Colorado has a five-year lookback window. Therefore, if you find out about hidden marital assets within this timeframe, you may be able to return to court and reach a fair outcome. Consider contacting a family lawyer at Johnson Law Group by calling (720) 744-3513 to schedule a consultation to review your options for getting your fair share of marital assets.
The post Determining If There Are Hidden Marital Assets appeared first on Best Family Law Attorney in Colorado - Johnsonlgroup.
