Our blog posts occasionally focus on property division in a divorce, since identifying, accurately valuating and then dividing assets as part of a divorce settlement can be of key importance to divorcing couples. This is especially true in high-net-worth divorces, where high-value assets – including, sometimes, a family-owned business, multiple real estate properties, diverse investments and inheritances – are often involved.
An astute divorce attorney with a deep well of experience in division of marital property can provide substantial assistance to a divorce client, and know when and how to optimally employ resources – such as financial advisers and tax/accounting professionals – for uncovering and valuing property.
This is especially important when a divorcing spouse may be seeking to hide the true value of net worth. Knowing what to look for can make a material difference in a divorce outcome. Likely areas of investigation often include a focus on the following:
- A spouse’s tax returns, with close scrutiny of attached schedules and interest income
- Reported mortgage interest and property taxes – the amounts might (or might not) match up accurately against real estate that has been listed on a net-worth statement
- Loan and credit card applications, and bank and other investment accounts – the former typically list assets; the latter could reveal transfers and withdrawals
There are many additional areas of scrutiny that could lead to relevant disclosures. Perhaps a spouse arranged to “loan” money to a friend or relative, to be paid back once a divorce is finalized. The obvious effect would be to reduce net worth and lower the value of assets to be divided. Perhaps a spouse has asked his or her employer to delay payment of a promised bonus until after the divorce. Perhaps a spouse is trying to deflate the value of a business by fraudulently inflating costs under the guise of travel or other expenses.
There are many things to consider, especially in a complex asset division. A family law attorney with experience in marital property division can answer questions and respond to concerns.
Related Resource: www.reuters.com “Advisers playing divorce detectives“