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How to Tell if Your Spouse is Hiding Assets in an Arizona Divorce

Fri 28th Jul, 2023 Arizona Community Property Laws

It can be difficult enough to go through a divorce in Arizona without worrying about whether your spouse is hiding assets.

Unfortunately, this is a real risk when going through a divorce and so it’s important to be aware of some of the ways to detect any hidden assets your spouse may have.

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What Are Hidden Assets?

Before delving into how to spot hidden assets, it’s important to understand what they are. Hidden assets can include any assets that your spouse is attempting to keep from you in a divorce.

These assets can range from bank accounts, investments, real estate, and even business interests.

Hidden assets are usually kept off the table during negotiations in an effort to reduce the other spouse’s share of the marital property.

Why Would My Spouse Hide Assets?

A spouse might hide assets in an Arizona divorce for a variety of reasons. The primary motivation is often financial gain. By concealing certain assets, a spouse can aim to secure a more favorable financial settlement.

This can be particularly tempting in Arizona, a community property state, where marital assets are typically split equally between spouses in a divorce.

Another reason might be to spite or retaliate against the other spouse, using hidden assets as a form of power or control.

The spouse may also hide assets out of fear of losing their financial security, or to preserve assets for their children’s future.

Lastly, they might be hiding assets to protect a business.

Understanding these motivations can help in identifying potential signs of hidden assets.

Signs Your Spouse Might Be Hiding Assets

Signs Your Spouse Might Be Hiding Assets

Detecting hidden assets in a divorce can be complex, particularly without legal and financial expertise. However, there are certain signs that may indicate your spouse is hiding assets.

Sudden Change in Financial Behavior

If your spouse starts making unusual financial decisions such as large or frequent withdrawals, transfers to unfamiliar accounts, or extravagant purchases, these could be signs of hidden assets.

Monitor your joint accounts for any suspicious activities.

Overcomplicating Financial Matters

If your spouse begins to make the financial matters of your divorce unnecessarily complex, consider it a red flag. They might create confusing paper trails, mix personal and business expenses, or set up trusts and hidden accounts.

Decline in Reported Income

If your spouse’s income suddenly drops or they start deferring salary, bonuses, or raises until after the divorce, they could be attempting to lower their financial obligations in the settlement.

Discrepancies in Documents

Any inconsistencies in financial documents such as tax returns, bank statements, and business records could be a sign of hidden assets.

For instance, if lifestyle expenses exceed reported income or assets listed on a financial affidavit don’t match those appearing on an income tax return.

Physical Assets

Hidden assets aren’t always monetary. Your spouse may start buying physical items of value such as art, jewelry, or vehicles, which they plan to undervalue or overlook during the asset division.

Remember, if you suspect your spouse is hiding assets in an Arizona divorce, it’s essential to consult with a skilled Arizona divorce attorney and retain a forensic accountant to ensure hidden assets are found and fairly divided.

What Documents Should I Look At?

What Documents Should I Look At to Find Hidden Assets

If you suspect your spouse is concealing assets, examining specific documents can provide crucial clues. Here are some essential documents to review:

Bank Statements

Regularly review all bank accounts, including joint accounts, personal accounts, and business accounts. Look for any unusual or large transactions that don’t align with regular income and expenses.

Credit Card Statements

Reviewing credit card statements can reveal significant expenditures, transfers, or purchases indicative of hidden assets.

Tax Returns

Inspect past tax returns for inconsistencies or changes in income, dividends, interest, and deductions. An overstatement of deductions or a decrease in income might suggest hidden assets.

Investment Statements

Look for any unauthorized sales, purchases or changes in your investment accounts. Also, check for undisclosed investment accounts at the financial institution you spouse has any accounts.

Business Financial Statements

If your spouse owns a business, the financial statements should be examined.

Look for signs like deferred income, sudden increase in debt, or hiring of new employees who don’t seem necessary for the business operations.

Property Records

Check property records to see if any properties were acquired without your knowledge. Your spouse could be transferring funds into real estate in an attempt to hide assets.

Loan Applications

Loan applications require a full disclosure of income and assets. Comparing these to your tax returns and other financial statements can reveal discrepancies.

Safe Deposit Boxes, Storage Units and Mail

It’s also worth checking any safe deposit boxes, storage units, or post office boxes for hidden assets or documents pertaining to them.

Remember, it’s essential to secure copies of these documents as you may lose access to them once the divorce proceedings commence. If you’re unsure, it’s always a good idea to consult a divorce attorney and a forensic accountant.

What To Do If You Discover Your Spouse Is Hiding Assets

If you discover that your spouse is hiding assets in an Arizona divorce, taking the right steps is crucial to ensuring a fair and equitable division of assets.

  1. Document Everything: Gather all evidence of the concealed assets. This can include bank statements, property deeds, or unusual financial activity. Keep copies of every document related to your spouse’s financial behavior.
  2. Hire a Forensic Accountant: A forensic accountant specializes in investigating financial discrepancies and can help uncover hidden assets. They can scrutinize tax returns, business records, bank statements, and other financial documents to identify any inconsistencies that may indicate concealed assets.
  3. Consult with a Divorce Attorney: An experienced divorce attorney can provide legal advice on how to proceed once hidden assets are discovered. They can guide you on the legal measures to take to ensure that the concealed assets are considered in the divorce settlement.
  4. File a Motion for Discovery: Through your attorney, you can file a motion for discovery which compels your spouse to disclose all financial information.
  5. Request an Injunction: Your attorney may advise you to request a court injunction. This legal order can prevent your spouse from selling, transferring, or disposing of the concealed assets once they’ve been discovered.
  6. Consider Mediation or Arbitration: If you believe your spouse is willing to cooperate once confronted, you could consider mediation or arbitration. These are less confrontational alternatives to litigation where a neutral third party aids in negotiation and dispute resolution.

Remember, every situation is unique, and discovering hidden assets in a divorce can be a complex process. It’s essential to consult with professionals who have expertise in financial matters and family law to ensure your interests are protected.

Arizona Divorce and Community Property Attorneys

If you have questions about divorce or community property laws in Arizona, you should seriously consider contacting the attorneys at Hildebrand Law, PC. Our Arizona divorce and family law attorneys have over 100 years of combined experience successfully representing clients in divorce and family law cases.

Our family law firm has earned numerous awards such as US News and World Reports Best Arizona Family Law Firm, US News and World Report Best Divorce Attorneys, “Best of the Valley” by Arizona Foothills readers, and “Best Arizona Divorce Law Firms” by North Scottsdale Magazine.

Call us today at (480)305-8300 or reach out to us through our appointment scheduling form to schedule your personalized consultation and turn your child custody or family law case around today.

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