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Hidden Assets and Your Galveston Divorce: What You Should Know

When you are getting divorced in Galveston or League City, it is important to understand how the court will divide property in your case. Given that Texas is a community property state, you might already know that most assets and debts acquired or accrued during the marriage will be considered community property. Courts divide community property between the spouses in a way that the court decides is “just and right.” Under the Texas Family Code, there is a presumption that any property possessed by either spouse at the time of the divorce is community property unless one of the spouses can prove otherwise by clear and convincing evidence.

That standard of “clear and convincing evidence” is a heightened standard of proof, and it can be difficult to meet. In some divorce cases, rather than going through the time and expense of trying to prove that a particular asset is separate property and should not be divided, a spouse will try to hide the asset. Or, a spouse might recognize that an asset is most likely community property and will attempt to conceal it. What do you need to know about hidden or concealed assets in a Texas divorce?

Identifying Hidden or Concealed Assets

If you have concerns about your spouse hiding community assets, you should know how community property can be concealed. Some examples include:

  • Transferring the asset to a friend or family member for “safe keeping” until the divorce is finalized;
  • Transferring the property to an account in another state or country under the spouse’s name;
  • Transferring the property to the spouse’s business; or
  • Fraudulently having the asset valued at an amount lower than what it is worth.

You can often locate hidden or concealed assets by working with a forensic accountant. The job of forensic accountants is to identify property precisely like this, and forensic accountants are frequently added to divorce teams in Texas.

Spouse Hiding Assets Might Have Committed Fraud on the Community

Under the Texas Penal Code, a spouse who attempts to hide or conceal assets in a divorce might have committed fraud on the community. You should know that fraud on the community can involve actual fraud or constructive fraud.

Actual fraud requires an intent to deceive the other spouse. Generally speaking, actual fraud on the community may have occurred if your spouse transferred community property for the main purpose of depriving you of any of your rights to that asset, and doing so dishonestly or with the intention of deceiving you. The key element of actual fraud is intent. Constructive fraud is often known as “wasting” community property, and is not typically the type of fraud on the community that occurs in a divorce when a spouse tries to conceal assets. In general, constructive fraud usually involves one of the spouses unfairly spending or using community assets, or unfairly accruing community debt.

Contact a Family Lawyer in Galveston and League City

If you have concerns about whether your spouse could be hiding or concealing assets in your divorce, you should seek advice from a Galveston and League City family lawyer who can assist you. Our firm is committed to serving clients in divorce cases in Texas, and we can provide you with more information about your rights under the Texas Family Code. Contact The Law Offices of Tad Nelson & Associates for more information.