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Financial statements can reveal hidden assets

On Behalf of | Feb 26, 2019 | Complex Divorce & Property Division |

A partner hiding assets in a marriage is something that has occurred as long as there have been marriages. Concealing assets is a sign of betrayal. In some cases, it can be a sign of marital infidelity. Tax returns can provide the key to determine if a spouse in California has not been honest.

Many people trust their spouses or accountants with preparing their tax returns and only give the return a cursory review. However, if someone suspects that his or her spouse is concealing assets, all schedules and supporting documents should be scrutinized. A 1040 is reported not only to the taxpayer but to the IRS. This form details all sorts of income and expenses, including deferred income. Schedule B reports interest income and dividends received. A person should review these documents to detect unknown bank or investment accounts.

Schedule D can be another area of discovery. This form addresses capital gains and losses. It may reveal a spouse’s unknown business or another investment item to which money has been moved. If the other spouse is claiming less in assets than he or she should possess, look to the retirement benefit statement. This may reveal larger than normal funding of a retirement account, such as an IRA, a 401(k) or 403b.

Discovering early distributions could be a sign that a person’s spouse is spending money elsewhere. Monthly bank account and credit card statements will reveal unusual spending. A credit report of the spouse will show undisclosed cards.

When a person is going through a divorce and suspects that his or her spouse is hiding assets, an experienced family law attorney can be vital. During the divorce process, a lawyer can make formal discovery requests. Through this process, the other spouse is forced to disclose all financial documents and a great deal of other information. Tax returns are often the first step in preparing for discovery requests.