Discovering "Hidden" Assets in a Divorce

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It is natural for a couple going through a contentious divorce to lack trust in each other. Accordingly, one of the first questions that a divorcing party will often ask their attorney is how they can be sure that their soon-to-be-ex-spouse has fully and fairly disclosed all of his or her property, and that he or she has not engaged in "divorce planning" - that is, moving or concealing assets that could be considered marital property so that they will not have to be shared with the other spouse upon divorce.

Luckily, the divorce process in Massachusetts has many built-in safeguards that are designed to make it much more difficult for a spouse to successfully conceal any of his or her assets prior to or during a divorce. One safeguard is the mandatory requirement for parties who are going through a contested divorce to make certain financial disclosures to each other within a specified amount of time following initiation of divorce proceedings. These disclosures, called "Rule 410 documents," include recent pay stubs, tax returns, and three years of statements for all of the parties' bank, retirement, brokerage, and other accounts, among other documents. In addition to these mandatory disclosures, a litigant in a contested divorce typically also has the ability to serve subpoenas on their spouse's employer and/or on financial institutions in order to obtain documentation about any assets standing in the spouse's name, or which are being held on his or her behalf by someone else. Finally, before a court will grant parties a divorce, they must both file Rule 401 financial statements with the court. These documents are signed under the pains and penalties of perjury and contain a detailed overview of each spouse's income, assets, liabilities, and expenses. Financial statements are extremely important documents, not only during the divorce process, but also in the event that a party wishes to challenge a court-ordered division of marital assets. Although division of marital assets is typically considered final upon divorce and cannot be later modified, there are exceptions to this rule, and the major one is fraud. If, for example, a party can show that his or her spouse lied by failing to disclose hidden assets on his or her financial statement, and that this failure to disclose had a material impact on the outcome of the case, then he or she may be able to have the property division portions of the divorce judgment overturned in light of the spouse's fraudulent conduct. 

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