There are many things about the divorce process that make obtaining a separation from one’s spouse a trying event. For example, going through the emotional strife inherent in losing one’s partner is particularly troubling. Furthermore, determining complicated questions involving child custody, alimony and asset division can make an already contentious topic even more adversarial. When facing these difficult hurdles, it is imperative one have all the information up front in order to make an informed decision and obtain a fair result. Yet, in some situations, particularly those involving high asset divorces, one or even both spouses may not be honest about their earning power.
California is a community property state, which means that all marital assets are split evenly in the event of divorce; marital assets include all property and income acquired during marriage. This means that disclosing all acquired assets is incredibly important in ensuring one receives a fair split of the pie. When a spouse is not honest about his or her income, it is important to do one’s own investigation in order to expose all assets.
One financial expert indicates that some spouses hide assets by claiming more business expenses than actually exist. This tactic can work because it appears legitimate to the IRS who can only see claimed business expenses on a tax return. If a spouse understands that the other has much higher spending power than what he or she is claiming, deceit may be lurking nearby.
It is imperative to gain access to all acquired assets when determining property division, child support and alimony during divorce. If a spouse claims only $100,000 in annual income when she actually makes $500,000, the other spouse will be deprived of a substantial amount of assets legally owed to him. A detailed investigation and proper representation during divorce can often expose income which is unaccounted for.
Source: Bloomberg, “Hunting for Hidden Cash In Divorce Proceedings,” Ben Steverman, June 3, 2013