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The Law Offices of DAWN K. GULL
The divorce process works best when you and your spouse are honest, both with each other, your lawyers, and with the court. Making honest disclosures and representations helps expedite divorce proceedings and ensure that you and your spouse exit the proceedings in fair and equitable positions.
However, not all parties in a divorce are motivated to treat each other fairly, and individuals who hide assets from their spouses and misrepresent their worth can gain an unfair financial advantage over the other person when the court enters its orders for property division, child support, and spousal support.
With that being said, always do your due diligence and carefully review every financial disclosure your spouse provides. Should you suspect they are committing fraud by hiding or undervaluing their assets, protect your interests and future by taking steps aimed at uncovering the assets and their value.
During any Pennsylvania divorce, you and your spouse will make financial disclosures to one another that list your assets and values. These documents will assist the court in identifying the marital property involved in the divorce so that it can be fairly and equitably divided.
If you notice any irregularities in your partner’s disclosure, do not ignore them. Instead, conduct a financial investigation alongside your divorce attorney. Some of the steps involved in such an investigation could include the following:
If you and your spouse acquired a high-value asset that will remain in your partner’s possession, it should appear on their disclosure. If it does not, your partner may attempt to retain possession of it or its value without subjecting it to property division.
Through asset tracing, you and your attorney can determine whether your partner still owns the asset in question or find out to whom it was transferred. High-value assets typically have a unique identifier that can be used to help locate them if they are lost or transferred to another. Real estate property, for instance, will have a unique legal description that must be conveyed through deeds, and vehicles have identification numbers and titles that show ownership.
Checking publicly available records may also yield useful information that can help assets. Legal proceedings, like bankruptcy, also require the filer to prepare and submit financial disclosures that list assets and their value. These can be used to demonstrate the existence of other assets and their value if your partner is attempting to undervalue them.
Certain estate planning documents, like trusts, may not be public records, but when someone dies, a probate proceeding generally needs to be opened if the decedent’s estate has any assets of value. A probate proceeding is public, so disclosures and financial statements filed in these proceedings can be compared with the financial disclosures in your divorce case.
If your partner owns any part of a business or is self-employed, they may attempt to conceal the true value of their business. A business that appears to be undervalued should prompt further investigation, and conducting an accurate business valuation is critical if your partner’s business or any part of it can be considered marital property.
It could be that your partner misrepresented the value of their business’s assets. In such a case, determining the genuine market value of those assets may be all that is necessary to expose your partner’s undervaluation to the court.
However, forensic accounting might reveal that the low value of your partner’s business is accurate. Your investigation should not end here, but instead go further, seeking to uncover the reason why the business has a low value. You may uncover a large transfer of assets as part of a purposeful devaluation, or embezzlement might be to blame for the business’s loss of value.
A Pennsylvania divorce court will identify and divide marital property, which includes most of the assets which you and your partner acquired during your marriage. It can also include the value by which certain separate properties, such as a business started before the marriage, have appreciated during the marriage.
In any case, the court is meant to divide marital property fairly and equitably, but it cannot do so if it does not know the value of that property (or that property even exists to begin with). As such, fraudulent and incomplete financial disclosures provided during the divorce process can negatively impact your financial future in various ways.
For example, suppose your marital property consists of $500,000 of known property, but your partner has concealed an additional $50,000 of assets. A court could divide the known property in a way that it believes to be equitable, giving you both $250,000 in assets, but your partner will still come out ahead, considering what they’ve hidden from you and the court.
Child support and spousal support orders are also entered after considering your and your partner’s finances, and if your partner’s income and wealth are underreported, you could lose out on spousal support or marital property to which you would otherwise be entitled.
Conducting a successful asset investigation or asset search is the first step in protecting your financial interests. If evidence establishes that an asset was not reported or its value was underreported, the next step is to bring the matter to the court’s attention.
Once confronted with your information and evidence, you and your partner may be able to reach a settlement or agreement on how to handle the issue. If the mistake was merely an oversight, the matter may be resolved by agreement with your partner filing an updated financial disclosure.
If your partner disagrees that there is a mistake or otherwise refuses to amend their disclosure, litigation is the likely next step. You and your partner would present evidence to the court, which would decide whether the disputed asset exists, whether it is marital property, and what its value is. The court has the authority to disregard inaccurate information as long as the evidence supports its decision.
If the court finds your spouse acted deliberately or with deceitful intent, the court can take further action to sanction your partner, such as awarding you a greater share of the marital estate. This underscores the necessity of not only uncovering all marital assets but also gathering sufficient persuasive evidence, and a skilled Pennsylvania divorce attorney can help you accomplish all of it in a timely manner.
Divorces in Pennsylvania can very easily become messy and complicated, especially when one spouse deliberately falsifies the information in their financial disclosures to retain more assets than they should.
The Law Offices of Dawn K. Gull has considerable experience helping clients uncover fraudulent and deceptive activities of divorce parties. We make full use of various tools to uncover and value marital assets and provide all relevant information to the trier of fact to ensure your position is clearly and fairly represented throughout the entire divorce process.
Contact The Law Offices of Dawn K. Gull today to learn more about our services.
Our offices are located in Wexford. To schedule a consultation, please call us at 412-440-5718, or fill out our online form.