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Hidden Assets in a Divorce May Be Just Clicks Away




by:
Sam M. (Trey) Yates
Law Office of Sam M. (Trey) Yates, III, P.C. - Houston Office

 
October 24, 2013

Previously published on Summer 2013

Over the years, I am often asked to help divorcing individuals track down potential assets of their spouses during a divorce. It is always an arduous job, sifting through files of paper records to find irregularities during discovery — pouring over piles of bank statements, credit cards bills, tax records and lots of paper receipts. In the past, I have had to rely primarily on traditional tools of the trade and experience to sniff out hidden monies, property or businesses strewn along a paper trail. Thanks to improving technology and online resources, this part of my job has gotten easier.

Today, we have new tools that allow us to apply our experience using computer and online technologies. This enables us to do our jobs a lot faster. Spouses who think they’re being clever forget one thing: electronic and online activity leaves traces. Experts say many people believe they have permanently deleted email, Facebook posts, files or other communication, when they haven’t.

Often, uncovering mischief or lies just takes basic electronic detective work. Free public databases, such as those tracking real estate deals, often provide information on lying spouses. For example, one of my client’s husband had disclosed 11 rental properties as community assets. However, with online resources, we were able to located two additional properties not on his list.

Tax returns provide a wealth of information for the trained eye. I have found offshore accounts, partnership interests, and bank and brokerage accounts previously unknown by the other spouse. In one of my client cases, I found that the husband had essentially “stashed” $80,000 with the IRS in over payments that he could have pulled out after the divorce was final.

Another area that I thoroughly review and investigate are pay stubs and other employee records that may reveal undisclosed company benefits. “Restoration” plans may be overlooked by the spouse and attorneys who typically focus on 401(k) and pension benefits. If an executive earns above $255,000 annually, the IRS rules (2013) state he or she must stop contributing to a qualified plan — 401(k). However, that executive may have an option to contribute to a “restoration” or “top hat” plan which may go unnoticed. Legally, these funds are still considered community property that must be included in the list of marital assets.

Spouses are also doing basic detective work themselves by browsing online social network sites, and the history of the family computer, where they are finding things like visits to bank websites where the couple doesn’t have an account. Many online searches on Google, Linkedin and Facebook are legal.

I do advise clients to be aware of laws that make hacking into a smartphone, secretly installing GPS on a spouse’s car, or installing keystroke monitors on someone’s computer potentially illegal. Depending on the state and the details surrounding how the data is acquired, there are still gray areas about which practices are acceptable.

Remember, the best defense in these matters is a good offense. As a married spouse, you have a legal right to know all the details of your community property and finances, and should always strive to understand what is going on in this area. Knowledge truly is power, after all!



 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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Author
 
Sam M. (Trey) Yates
Practice Area
 
Family Law
 
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