Searching For Undisclosed Assets During a Divorce

The divorce process is a very emotional time for both parties involved and oftentimes can lead to doubts regarding the integrity of your spouse. Hidden assets are a very common concern among individuals who are going through a divorce. Usually, the spouse who had very limited and/or no previous knowledge of the parties’ finances during the marriage is the one most concerned about hidden assets. The process of identifying hidden assets can be very challenging and labor intensive and, for that reason, it is imperative to sit down with your professionals and discuss a plan of action along with your ultimate goals of the case.

There are a number of ways to identify hidden assets and this article will discuss a few of the more common methods of identifying hidden assets.

The first and most obvious step is to request the documents directly from your spouse. This is typically done through the initial discovery phase and can be quite helpful. Methods to obtain these documents include but are not limited to: Mandatory Disclosure, Requests to Produce, Interrogatories, Subpoena’s and testimony given under oath/depositions.

Mandatory Disclosure:

Mandatory disclosure requires the parties of a divorce to provide each other various financial documents for a specific time period. The Mandatory Disclosure must be filed within 45 days of the date of petition.


Interrogatories, also known as written questions, are questions that can be asked of your spouse related to your case. If your spouse refuses to answer these questions, you can ask the court to order your spouse to answer the questions. Interrogatories are a great way to get your spouse to admit to specific statements that you may think are true.

Requests to Produce:

Requests to produce are additional document requests above and beyond the standard mandatory disclosure mentioned above. Requests to produce can be used to request very specific documents that you believe exist. If your spouse refuses to answer the request to produce or you believe his/her response is inadequate, then you may have your attorney file a motion to compel with the court.


Subpoenas are a great way to receive documents from various individuals, institutions and employers. Anyone who receives a subpoena is under court order to provide the requested documents. For example, if you believe your spouse holds accounts at a specific institution, you can have your attorney file a subpoena on that institution and they will be required to provide all documents/statements related to your spouse. This may disclose accounts you were not previously aware of.

Testimony Given Under Oath / Depositions:

Depositions are considered an official proceeding, which means, the person being deposed is sworn in under oath and is subject to perjury if caught not telling the truth. Depositions are a great way to sit your spouse down and ask him/her very detailed questions about any concerns you may have regarding hidden assets. Also in attendance at a deposition is a court reporter that transcribes the entire dialog between the parties. This dialog can then be submitted as evidence in court if there are any discrepancies in testimony.

Once you have obtained the various financial documents provided under the methods mentioned above, the next step is to analyze these documents. Some of the best resources for finding hidden assets are tax returns, checking/saving account statements, investment account statements, credit card statements, loan applications and, if necessary, conducting a lifestyle analysis.

Tax Returns:

The first document you should analyze if you are concerned your spouse is hiding assets is the personal and business (if applicable) tax returns. Tax returns provide essential information regarding assets and the income derived from those assets.

Analyzing tax returns allows you to identify sources of income, which in turn may lead to the asset generating this income. Some of the more common sources of income/proceeds include but are not limited to: wages, interest and dividends, business income, rental income, capital gains and losses, retirement plan distributions, tax refunds and casualty and theft losses.

Wages/W2’s can provide critical information related to the parties salary, deferred compensation and/or any other business perks received. Verifying the amount of your spouse’s salary and confirming the full amount is deposited into a known account is important as well. For example, if you know your spouse’s monthly salary amount, however, only a portion of that amount is being deposited into accounts you are aware of, the question becomes, where is the rest? This scenario may indicate there is an undisclosed account.

Interest and Dividends:
Interest and dividends are reported on Schedule B and are generated from investment assets. The tax returns will usually identify the source of the interest and dividends. This helps identify the existence of investment accounts, bonds, certificates of deposit, mutual funds, note receivables, etc.

Also on Schedule B are questions regarding foreign accounts (Part III of Schedule B). Depending on the answers to these questions, they could confirm the existence of foreign accounts/assets, which may not have been previously disclosed. Foreign accounts/assets can be hard to find as some offshore banks have secrecy laws preventing the disclosure of these assets. One step that could be used to identify the location of possible foreign accounts is to get a copy of your spouse’s passport. This may reveal travels to certain countries where foreign accounts may exist.

Business Income:
Business income is usually reported on Schedule C or Schedule E. Tax returns reporting on these schedules may identify certain side businesses that may not have been disclosed otherwise. Schedule E can also disclose passive activity carryovers, which are considered assets. Schedule E will also identify any and all estates/trusts related to your spouse.

Rental Income:
Rental income reported on a tax return could identify real estate that was not otherwise disclosed.

Capital Gains and Losses:
Capital gains and losses are reported on Schedule D and show the sale of assets for a gain or loss. If you find the sale of assets reported on a tax return you should inquire as to what happened to the proceeds and/or trace the proceeds. If the sale consists of securities, make sure you are aware of the investment account holding those securities.

Retirement Plan Distributions:
Retirement plan distributions indicate there are and/or were retirement accounts. All distributions from a retirement plan should be traced to a specific bank account, investment/investment account or any other final destination of the proceeds. If you can’t trace the proceeds to a known account or destination, this may indicate additional undisclosed accounts/assets.

Tax Refunds:
It is important to review old tax returns to identify any and all tax refunds/carryovers. When a spouse thinks a divorce is looming, they may intentionally overpay previous year’s tax returns thinking they can get the refund after the divorce is finalized. If your spouse did receive previous year tax refunds it is important to trace the proceeds and determine what they were used for (i.e. personal or real property).

Casualty and Theft Loss:
If there is a casualty/theft loss reported on a tax return you should inquire about the insurance proceeds received and determine what they were used for. Tracing these proceeds may lead to an undisclosed asset.

Reviewing the itemized deductions (Schedule A) on a tax return can be helpful in identifying assets as well. For example, reviewing Schedule A may identify real estate and/or personal property taxes paid, which in turn can lead to the identification of hidden properties and/or personal property.

Also reported on Schedule A are state and local income taxes. State and local income taxes paid could indicate there are assets in another state that are generating income and therefore taxes are being paid on that income.

Mortgage interest/points reported on Schedule A indicate there is a mortgage on a property. It could also indicate there was a refinance on that property. If there was a refinance and proceeds were received, these proceeds need to be traced out. Often times when doing a refinance/mortgage the bank will want you to prepare a financial statement of your personal net worth. Asking for this document could disclose assets that may not have otherwise been disclosed. This is discussed in further detail below.

Miscellaneous deductions reported on Schedule A are another great place to look for possible hidden assets. For example, if you see a deduction for estate planning and you were not aware of your spouse retaining an estate planner, you may want to speak with this individual. Discussions with the estate planner could lead to the discovery of hidden assets or a secret trust.

Checking/Savings Account Statements:

It is imperative when analyzing checking/savings accounts to look at all deposits in and all withdrawals (including canceled checks and wire transfers) out. Deposit slips are important to obtain, as they will identify the source of the deposit, which could lead to the discovery of hidden assets.

For example, dividend income and/or interest income deposited into an account could identify an undisclosed stock or bond. When reviewing the deposits you also want to look for any deposits/transfers in from an account that you are not aware of. This is an indication that there may be additional accounts that were not previously disclosed by your spouse.

Withdrawals are very important to analyze as well, specially canceled checks. Make sure when requesting canceled checks that you request copies of both sides of the check. This will indicate who the check was made to and also who and where the check was deposited. You are looking for whom the check was written to as to identify if money is being transferred to any friends and/or family. Keep in mind the spouse could also be sending checks to businesses that are owned by friends or family to make it look like a legitimate expense, to only later be reimbursed for the amount of the check.

Cash/ATM withdrawals are another area to scrutinize as this may indicate your spouse is stashing cash in an undisclosed account, safe deposit box or with a friend or family member.

It is also important to review the payment of monthly bills out of known accounts. If you know certain monthly bills exist and you do not see them being paid out of any of the accounts you are aware of, this may indicate there is an undisclosed account, as these monthly bills are being paid from some source of funds.

Investment Account Statements:

The analysis of investment accounts is very similar to checking/savings accounts in that you are looking for any deposits and/or withdrawals to/from unknown accounts.

Credit Card Statements:

Reviewing credit card transactions may lead to the discovery of hidden assets as well. This could include the purchase of artwork, jewelry, other collectibles, cars or any other personal property that might not have otherwise been disclosed. It may also lead to the discovery of what we call in the divorce world, marital wasting. This is where one of the spouses may be intentionally depleting the marital estate to make it look lower than it really is. Or maybe one of the spouses is buying significant gifts for a girlfriend/boyfriend and using marital funds to pay for it.

You should also review all cash advances on a credit card and trace those proceeds to a specific account. If you do not see those proceeds deposited into a known account, it may indicate there is a hidden account.

Matching credit card payments with the related withdrawal out of the bank account can be helpful in identifying hidden assets as well. For example, assume you are seeing payments being made on a credit card but you do not see the actual funds being withdrawn out of any of the disclosed accounts? This could indicate there is an undisclosed account.

Loan Applications:

Loan applications are a great place to identify hidden assets. Most of the time when filling out a loan application the bank will request an individual to prepare a personal financial statement showing their total net worth. Most individuals will be inclined to include all assets to make their net worth as high as possible for lending and rate purposes. This shows the bank you have collateral/net worth and the bank may feel more comfortable loaning you the funds. At the time of filling out this personal net worth, individuals are not necessarily thinking about divorce so they are more inclined to disclose assets that may not have otherwise been disclosed.

Lifestyle Analysis:

A lifestyle analysis, also known as a living expense analysis, is a great exercise to identify possible hidden assets. To prepare a lifestyle analysis, you must schedule out all deposits and withdrawals for all known bank accounts/investment accounts and also schedule out all credit card transactions. With that being said, this process can be very expensive and time consuming depending on the number of accounts and the number of transactions reported on those accounts. Before going forward with this exercise it is important to have a discussion with your professionals and make sure the risk is worth the reward.

When preparing the lifestyle analysis, you are looking for extravagant purchases and/or identifying what kind of items your spouse is purchasing. You need to ask yourself one question; does the income reported by your spouse support the lifestyle your spouse is living? If there is a discrepancy, then the question becomes, how is this lavish lifestyle being funded? Is your spouse incurring more debt to live this lifestyle? If not, then did your spouse inherit any money or spend down savings? If the answer to these questions is no, then it is possible there are hidden assets that your spouse is not disclosing.

In conclusion, it is important to remember that knowledge is power. When going through a divorce, understanding as much as possible regarding the divorce process will give you some piece of mind and emotional strength. The idea that your spouse may be hiding assets during a divorce is a real concern, however, realizing that there are methods to identify those possible hidden assets, as mentioned above, hopefully will alleviate some of the emotional stress. One of the best ways to protect yourself during a divorce is to have a strong and knowledgeable professional team. This is essential and can lead to the inclusion of all assets related to the marital estate and a fair settlement offer for both parties.



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