The financial settlement in a divorce will go a long way towards shaping the quality of each spouse’s life as they move forward in their next chapter. Getting that fair settlement means having an accurate understanding of a couple’s entire portfolio. That starts with identifying valuable assets, and then placing a proper monetary value on each one.
Strategies to Identify Valuable Assets
In an ideal world, there wouldn’t be any strategy required for this. Both spouses would fully disclose all assets and the valuation process could move forward. But in the real world there can be problems.
The first challenge is that in high-asset cases, there may be genuine confusion over all the property—everything from liquid cash to investments to business interests to real estate—that is actually owned and how to document it. The second challenge is that divorces are, unfortunately, often marked by a loss of trust between the spouses. One may believe the other is failing to disclose an asset. Whether the allegation is true is, of course, different in each case. But it does underscore the need for a transparent process where both sides are confident that all assets are on the table.
Whether an investigation is being done as a simple precaution or is based on suspicion that information is being withheld, there are some basic steps that can be taken. That starts with a review of tax returns and bank accounts, with an eye to making sure they balance out. If there are significant cash withdrawals, receipts should be able to prove what they money was spent for.
An attorney can also run a search on all accounts set up with certain Social Security numbers. This includes not just the spouses’ numbers, but also those of children, friends ,or anyone else whose personal identifying information (PIN) might be used to create what amounts to a dummy account for the purpose of hiding assets.
Depending on the complexity of the case, this investigation can require specific financial expertise. Experienced lawyers, like those here at Connor Roberts, are networked with professionals who can assist such investigations.
The Valuation of Assets
There will be some assets where a concrete financial value can be subject to dispute. A prime example is ownership of a business. The true value of a business is not just its current income, but the potential for income. That can start with something as basic as reviewing outstanding invoices, and include expert witness testimony on what the business might be realistically expected to do in the future.
Stock portfolios, especially those built around investments in aggressive funds, can be subject to a lot of rises and falls. The value of the portfolio at the time of the settlement might not be a true reflection of its value. This is another area where working with a lawyer that is networked with the right expert witnesses, who can testify to the true value of a portfolio, can be exceptionally helpful to a spouse.
Full Disclosure Is Necessary
It must be noted that hiding assets in a divorce is a serious offense. This includes not just the direct hiding, but any effort to deliberately devalue the asset—such as a business not collecting on invoices until after a settlement is over. The financial disclosure information in a divorce settlement is submitted under penalty of perjury.
This means any information that is deliberately inaccurate can result in criminal charges. It can also have ripple effects through the rest of the settlement. For example, a judge may see contempt of court as an example of a spouse being an unfit parent, and make a custody decision based on this. The judge is not obligated to take this into account. But they might. It’s not worth the risk. The best way forward is full disclosure, and then having an attorney who will fight hard through negotiation to secure what’s most important to their client.