Hiding Assets in Divorce
Dividing assets in a divorce can be a grueling and emotional task. The longer the marriage, the greater likelihood the parties have comingled bank accounts, health savings, equity in a home, and investment capital gains. Under the Utah Rules of Civil Procedure Rule 26.1, both parties are to provide a complete financial snapshot of their lives. Hiding assets is more rampant than you may think. A recent article by Forbes points out that women who have a working knowledge about their family finances can help identify changes that may signal a husbands misdeeds. http://www.forbes.com/sites/jefflanders/2012/03/14/divorcing-women-heres-where-husbands-typically-hide-assets/
Self-Employment & Business Owners
Determining the annual income of each spouse is critical in a divorce proceeding. Combing through Federal tax returns and W-2’s is a simple formality, but if your spouse is a business owner, he may defer salary, reduce commissions and take cash distributions that won’t be readily apparent to the naked eye. Proof of income is used to determine child support and alimony. If there are wide discrepancies between the parties concerning income and assets, especially a business valuation, a court may appoint a 3rd party to take a forensic accounting. Failing to catch mistakes and understated income can cost your thousands of dollars in future support.
Keeping an updated and organized list of personal property is imperative, especially items such as family heirlooms and jewelry. You should also familiarize yourself with the dates of purchase and an estimate of value if possible. By creating a list, you are better able to take an inventory of any items which may be misplaced or missing.
One of the most difficult parts of dividing assets between former spouses is coming to an agreement on the marital home. This can be very emotional, especially if both parties want to remain in the home during and after divorce proceedings. If you are awarded the marital home, it is likely the court will order the home to be refinanced. By refinancing the home, the equity may be divided, if any, and the spouse who will no longer be living in the home may be released from the mortgage. You should also be aware of the tax consequences of refinancing and the step up the value of the home.
How to Protect Yourself
To protect yourself, and your financial future, make sure you work with a qualified divorce team. Here at Hepworth & Associates, you can rest assured that not only your legal rights protected, but we have a team with experience in finance and taxes.