Divorce is one of the most stressful experiences adults face in their lifetime, and when you add in the likelihood that the divorce is contentious, the stress multiplies exponentially. While we all hope for an amicable divorce in which all assets are divided fairly, the children are co-parented with parents having equal time, and no fighting occurs, the reality is this: Divorce is often a bitter, ugly war that rages on for months or even years.
One of the biggest points of contention in any divorce is money. Money is one of the two biggest issues that divorcing couples argue about (along with who will get custody of the children). Many people go to great lengths to hide money from their ex. A good divorce lawyer will have an investigator on his legal team to find any hidden money and get his client the money and other assets that should be included in the marital estate.
During the discovery phase of the divorce process, your lawyer will request documents and information relating to assets, income, debts, and liabilities. Tangible assets include cash and other hard assets that can be sold or liquidated: homes, automobiles, jewelry, fine art, technology, and other personal property. Intangible assets include assets such as savings accounts, checking accounts, brokerage accounts, retirement accounts, stocks, investment income, royalties, copyrights, and patents. To get a thorough financial picture, you must request a wide variety of records including receipts, loan documents, deeds, title records, account statements, stock certificates, subscription agreements, royalty agreements, tax documents, and W-2 forms.
Tax filings often hold the key to learning everything there is to know about your ex’s financial situation. Being the “out spouse” in a divorce means you had little or no knowledge of the family finances. The out spouse in any divorce is at a disadvantage because shrewd spouses know many tricks to hide money and other assets from their spouse, and if a separation was in the works for quite some time before the divorce was filed, your spouse had plenty of time to move money around and hide it.
Tax information your divorce lawyer will look into includes:
- Form 1040: Income from wages
- Form 1040: Interest and dividend income
- Form 1040: Retirement plan distributions
- Carryforward: An IRS or state income tax rule that allows taxpayers to save an unused deduction, credit, or loss and use it in a later tax year.
- Itemized deductions
- Miscellaneous deductions
- Foreign accounts
- Profits or loss from a business
- Supplemental income and loss
Checking the tax filings in both of your names may also turn up any hidden bank accounts your spouse has had throughout the course of your marriage or since your separation. Your divorce lawyer will have what are known as “forensic accountants” on staff to help dig through your financial history and that of your spouse and learn as much as possible about your finances.
If you’re divorcing and don’t have a lawyer yet, you must get one. Only an experienced divorce lawyer can prevent your spouse from keeping any hidden money; your divorce attorney will fight for you by being your voice during this difficult time.