Why Hiding Your Assets In A Divorce Is A Poor Idea


By Cassandra Daniels | November 4, 2022

Before you file for divorce, you may have questions regarding your financial security, especially if you have questions about hiding your assets in a divorce. Whether you are the breadwinner of the family or not, you will need to analyze your financial situation to prepare for your divorce.

Furthermore, you might share children with your current spouse and have expectations about child support and child custody. If you do, there is no better time to reach out to an experienced divorce attorney to help you with your case.

Avoid hiding your assets in a divorce as a strategy. Hiding assets may not be uncommon, but it can seriously impact the outcome of your divorce if your spouse and their legal team find out about it.

Searching for a divorce attorney in Houston? Contact Daniels Law Firm today.

Why You Should Avoid Looking For Ways To Hide Your Assets In A Divorce

Pulling away from hiding your assets in a divorce is not just a general rule of advice. The law itself is in chapter 7 of the Texas Family Code.

Hiding Assets Is Fraud

To further explain why hiding your finances is considered fraud starts with understanding the phrase “community property”. Texas is a community property state, which means that any property a couple acquires during the marriage is in the ownership of both spouses.

There are only a few exceptions to what community property is, including inheritance or gifts. The best way to determine the value and standing of funds you don’t believe belong to both you and your spouse is by reaching out to a family law attorney who can survey your situation and offer legal guidance.

Your Spouse Can Prove Community Fraud In Court

Read that one again!

Even if you think your plan to hide money is a seamless plan, your spouse’s legal team can do their own digging to find out the truth. 

Proving community fraud is proven in a number of ways, including through any of the following: 

  • Public records
  • Income tax returns
  • Financial account statements
  • Credit card statements
  • Loan applications

An experienced legal professional might even look into your business and its finances. Texas law says you and your spouse are entitled to a portion of all combined marital property. If found breaking this law, the court has the right to deem the other party the “wronged spouse” and can then decide what the next steps are when dividing the entire estate.

A Judge Can Decide How To Divide Hidden Assets

In a hypothetical situation, let’s say you are found guilty of committing fraud against the community. The next steps will include the court deciding on a solution they consider to be “just and right,” dividing the value of those hidden assets as they deem necessary.

All assets may then be handled by the court to be recalculated and divided in any legal and/or equitable way they see fit. Awarding funds usually happens in one of three ways:

  1. The wronged spouse is given an appropriate share of the community estate.
  2. Judgment is given in favor of the wronged spouse against the spouse who committed fraud.
  3. The wronged spouse is awarded both a monetary judgment in addition to a share of the community estate.

Each of these possible outcomes is exactly why it isn’t a recommended strategy to hide assets before or during your divorce.

Have specific questions about community property? Call the Daniels Law Firm today to begin preparing for your divorce

How Hidden Assets Affect Shared Debts

Along with community property comes shared debts. Any debts acquired during the marriage together (co-signing, joint loans) are a joint responsibility in the eyes of Texas laws. You can claim reimbursement or offset the shared debt, but you need to talk to an attorney about your particular options.

Just like your assets are given a combined value, so are your shared debts. In the hypothetical case that you have discovered hidden assets, shared debts are then divided to offset those hidden assets.

The bottom line? Avoid hiding your assets in a divorce and ensure that all debts and assets are accounted for to avoid potential conflict.

What Should I Do If I Suspect My Spouse Is Hiding Assets?

Talk to a divorce attorney who understands family law. The truth is that divorce affairs concerning money have the potential to become complicated, drawn out, and emotionally taxing. Having a knowledgeable attorney on your side significantly helps you strategize and have a clear understanding of each phase of the process.

If you are awaiting a consultation or meeting with your attorney, you can take steps to better prepare for that meeting. Start by gathering all of your financial information so your attorney can get a comprehensive understanding of what your financial situation looks like. 

Have A Strategic Partner At Your Side

Avoid the time, effort, and headache of second-guessing yourself and your spouse. Hiding assets during the marriage and throughout the divorce process is wrong. Because these types of issues can bring up many emotions, you need to have a professional in your corner to take care of your best interests based on the law.

Haven’t filed for divorce yet? Strategize before you do with an experienced divorce attorney in Houston. Call the Daniels Law Firm today.

The information in this blog post is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from Daniels Law Firm or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.

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