What Divorce Lawyers Look for When Examining Financial DisclosureBy DADvocacy™ | May 23, 2022
You have decided to proceed with a divorce. Now you are facing determinations about alimony and child support, which are governed by the Florida Family Law Rules of Procedure, specifically Rule 12.285’s Mandatory Disclosure requirement.
Through Mandatory Disclosure, both sides must produce various financial and other documents for the court’s review, including but not limited to tax returns, checking account statements, and pay stubs. We submit our client’s documents to the other side, and we receive the same types of documents from the opposition in exchange.
This documentary exchange allows both sides to substantiate claims about their respective financial situations and to ascertain each side’s resources as the court proceeds with determining alimony and child support. Do people try to hide assets? You bet, but that kind of game-playing is ill-advised: when a party tries to hide assets, there is usually an evidentiary trail, whether digital or paper.
In the discovery process, lawyers review our client’s documents and those presented by opposing counsel. We search for oddities in the usual banking and credit card statements, but we also look at other means of hiding income or assets, such as the following:
- Safety deposit boxes and safes can be used to hide assets. We can use interrogatories to make the party account for the use of a safety deposit box under oath. Whether the safety deposit box or safe is commercial, private or held under a business name, we can still compel disclosure via the interrogatory.
- Overpayments can be suspicious, especially to entities that issue refunds, such as health insurers, tax authorities, credit cards and others.
- Bank accounts can be used to send money to Paypal, Venmo and other digital pay platforms, for which we can ask for statements. Statements from those platforms may show payments to other platforms, such as those for trading stock and virtual currency – another income source.
- Money or property that is declared as a gift from family and friends can be suspect. Likewise, money being transferred to family and friends as “gifts” spur the same concerns, as do newly created trusts.
- Nothing stops either party from examining the social media of the other party. Posts on Facebook or Instagram may indicate spending or assets not otherwise disclosed.
- A credit report can show debt attached to a property or a credit card that the other spouse never knew about, which in turn can indicate other assets or sums in accounts that were never disclosed.
- If there is a decrease in regular pay, a delay in new business deals, or the odd omission of the usual commissions, expected reimbursements or bonuses, the spouse may be asking the employer or client to delay payment or to direct payment to a different bank account until after the divorce settlement. While we usually ask for the last 6 months of pay stubs under Rule 12.285, depositions and interrogatories may be used to ask for older pay stubs.
- Business owners’ ledgers may require closer scrutiny if money is being funneled into projects that don’t actually require it (or even exist) so that the money will be put back into the party’s bank account after the divorce. Likewise, business owners may delay debt collection and/or invoicing using the same strategy.
- Tax returns list bank accounts for direct deposits of tax refunds. We check if that bank account was never otherwise disclosed.
- Courts and opposing counsel can and will catch onto fake loans from family or friends that parties use to conceal their own money. Similarly, documented loans will get attention too: for example, we question when there is a loan deposit from the Paycheck Protection Program or some other business-related loan, yet the party has not declared any business that the loan is financing.
These red flags are not exhaustive. These areas are a solid start, but other concerns may apply to your specific situation. Further review can help you to understand what those areas may be.
For more information on red flags that tend to appear in banking and credit card statements, please see our blog post, “Top 10 banking red flags in discovery”. For a free consultation, please complete this form (https://dadvocacy.com/intake-form/).
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