When a spouse makes the difficult decision to file for divorce, they typically understand that they will have to address and resolve a multitude of important legal issues over the coming months, including child custody, child support, spousal support and, of course, property division.
Here in Texas, we are a community property state. This means that any property acquired by a couple during the course of the marriage is split evenly upon divorce, such that the assets are accurately valued and then divided 50/50.
While property division is typically straightforward in many cases, it can become considerably more complex when business interests are involved. That’s because some former spouses — and business owners — will go to great lengths to hide assets during their divorce.
According to experts, unscrupulous business owners can take several approaches to hiding assets during divorce negotiations, including inflating business expenses or understating revenue.
To illustrate, he may present books showing that that the company’s profits have (not un-coincidentally) declined right around the time of the couple’s separation or she may be taking customer payments in cash, such that assets can be easily diverted and concealed.
In many cases, an experienced family law attorney has the skills needed to identify when a person is trying to prevent their former spouse from realizing significant business income during the course of divorce negotiations.
However, experienced attorneys also know when it’s time to consult with a forensic accountant, a financial professional with the special skill set needed to uncover the business income to which a spouse is legally entitled.
Source: Bloomberg, “Hunting for hidden cash in divorce proceedings,” Ben Steverman, June 3, 2013