Though couples divorce for a number of different reasons, one common theme that arises once the process begins is loss of trust. When trust goes out the window, it then makes sense that one or both parties will begin to hide assets or, on the flip side, to suspect the other of squirreling away funds. Hiding assets in a Kentucky divorce is illegal, as it deprives one party of his or her fair share of the marital property. To ensure the most equitable distribution of property in your divorce, it would be in your best interest to take measures to either find hidden funds or eliminate the possibility that hidden assets exist.
According to Forbes, people who hide assets in divorce typically use one of three methods for doing so: They deny the existence of assets, they transfer assets to a third party, they create false debt or they claim to have lost an asset. Unfortunately, proving that one or more of these events has or has not occurred can be difficult. That said, a paper trail almost always exists to accompany the presence and spread of assets. If you hope to find this paper trail, a good place to begin your search is with past tax returns.
As you look through past tax returns, there are certain red flags for which you should look. The first is for itemized deductions. This section often unveils a goldmine of hidden assets for many people. For instance, deductions for property taxes may reveal one or several hidden properties.
Schedule B can help you identify the existence of assets that generate dividends and interest. Compare this section of the returns with assets your list of known assets to identify undisclosed or new assets.
Profit or loss statements from a business may also prove helpful. This section may include a deprecation schedule, which may reveal that the business or a related entity purchased additional assets within that tax year. Schedule D, or the section that details capital gains and losses, can also help you identify assets that are either new or that disappeared.
The supplemental income and loss section serves as a means of reporting income from rental properties, partnerships, royalties and S corporations. Review this section carefully for signs of hidden assets.
In addition to reviewing tax documents, do not forget to look to more obvious places for hidden assets, such as safe deposit boxes, safes, filing cabinets and computer hard drives. Also, talk to your financial advisor, who may have a better understanding of your shared assets than you do.