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) 463-4333.
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
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
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 that 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
Not listing an asset on necessary financial disclosures
Signing over 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 asserts
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 busines
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) 463-4333 to schedule a consultation to review your options for getting your fair share of the marital assets.
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OVERBOARD: HOW TO AVOID SINKING IN YOUR COLORADO FAMILY LAW CASE
Written by Family Law Attorney Myles S. Johnson
Divorce doesn’t have to be dramatic. For the litigants, losing your spouse is significant enough. But you can choose the way it affects your daily life. The only guarantee I can give is that the feeling that you have right now will not be the feeling you end with. This is a season in your life, and it must be approached that way.
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OVERBOARD: HOW TO AVOID SINKING IN YOUR COLORADO FAMILY LAW CASE
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