January 11, 2017Author: Steven Goldman
January 11, 2017Author: Steven Goldman
In anticipation of a divorce, most attorneys will advise their clients to gather financial documents and make a detailed list of their assets. Attorneys may even advise a client to secure up to 50% of the couple’s liquid assets (e.g., transferring money from a joint account to an individual one). The rationale behind this aggressive strategy is that the other spouse cannot dispose or hide assets to which he or she does not have any access.
Logically, the other side of the coin seems to be that it would be advantageous for a spouse to hide or squander those very same assets before they are divided. If a spouse does not know a particular asset exists, or it has already been spent, that asset cannot be divided. However, court rules and procedures, as well as improved investigative techniques, have made this a risky endeavor.
In every divorce, parties are permitted discovery of the other spouse’s assets (See Part Four of the Rules of the Supreme Court of Virginia). This includes requests for documents (including electronically stored information), interrogatories (requiring sworn answers), depositions, and subpoenas. Through these discovery techniques, a savvy attorney is usually able to track one’s spending, withdrawals, and transfers. This can lead to the discovery of new accounts that were never even revealed. Subpoenas can get documents that a party refuses or fails to provide directly from the institutions themselves.
In cases involving more complex efforts to hide assets, attorneys may enlist the services of private investigators. Private investigators are not only the men and women hiding behind the bushes with a camera, but typically also have advanced financial investigating skills and expertise. Through various computer programs, investigators can retrieve deleted data from computers and mobile phones, trace deleted financial transactions, and even monitor cell phone use for clues and evidence.
Virginia, as well as 40 other states across the country, are “equitable distribution” states. This means that all marital property belonging to the parties shall be divided fairly, and not necessarily equally. Per §20-107.3 of the Virginia Code, the Court shall consider “the use or expenditure of marital property by either of the parties for a nonmarital separate purpose or the dissipation of such funds, when such was done in anticipation of divorce or separation or after the last separation of the parties.” Courts have used this statute to justify unequal distribution of marital assets in accounting for one party’s efforts to hide, transfer, or spend away the couple’s assets.
Additionally, Courts have the authority to award attorney fees and court costs in a divorce and will consider one party’s efforts to hide assets when making that determination.
As technology continues to develop, the risks in hiding assets will continue to rise. Modern investigative techniques are readily available to discover hidden assets while laws are continually updated to discourage someone from hiding his or her assets. As a result, hiding assets carries far too much risk in a game that no one truly wins.
