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When a spouse hides assets to manipulate the divorce process

On Behalf of | Apr 25, 2024 | Divorce

Those preparing to divorce in Texas have numerous important issues to address. For example, spouses often have to reach agreements about child custody matters. Even those without children likely have property and debts that they need to divide.

The asset division process in Texas utilizes a community property approach. The income earned throughout the marriage and any resources acquired with that income theoretically belong to both spouses as part of the marital estate. Any debts acquired during the marriage are also the responsibility of both spouses.

Typically, each spouse needs to provide full financial disclosures to the other and to the family courts. Some people attempt to manipulate that process by hiding assets. They may physically hide assets, withdraw funds from shared accounts or undervalue certain resources.

Hidden assets produce unfair outcomes

If one spouse does not understand the full extent of the marital estate, they cannot claim their fair and reasonable share of marital assets. Attempts to hide physical property or divert income from marital accounts can lead to an unreasonably skewed property division outcome. An individual who lies about their circumstances might retain an unfair portion of the marital estate because they do not disclose the entirety of their assets and incomes.

Hidden assets can complicate the divorce process

Some spouses legitimately overlook hidden assets during divorce negotiations. These people are at risk of an unfair divorce outcome. Others quickly spot warning signs that there may be unreported income or undervalued assets. Provided that someone identifies the warning signs of financial misconduct as they prepare to divorce, they could potentially leverage that information in family court. Someone who can prove that their spouse intentionally hid assets from them and the courts might receive a more favorable property division decree.

Family law judges frequently penalize those who intentionally hide assets by reducing how much of the marital estate they retain. Of course, reporting hidden assets to the courts can further complicate an already complex divorce.

The only way to better ensure a fair outcome when dividing marital property as part of a Texas divorce is to carefully review all disclosures, look over marital financial records and speak up when something doesn’t seem accurate. Those who take prompt action when facing spousal misconduct during divorce proceedings can potentially reduce the long-term financial impact that hidden assets may otherwise inspire.