In a Colorado divorce, property division involves the equitable allocation of marital assets and liabilities, either by agreement or through a court order. But what happens if one spouse is not being completely honest about what marital assets and debts exist? How can you ensure that a division is equitable if you don’t know what all of the assets are? A fair division becomes nearly impossible if one party conceals financial information. If you suspect your spouse may be hiding marital assets or debts, working with a knowledgeable Colorado divorce attorney experienced in property division is essential. Here is what you need to know if you suspect your spouse is hiding marital assets.
Financial Disclosures
To understand your legal options, it helps to know what the standard disclosure process in divorce looks like in a Colorado divorce. According to C.R.C.P. 16.2, both parties are legally required to provide full and honest disclosure of their finances. Within 42 days of service of the Petition for Dissolution of Marriage, each party must exchange comprehensive financial disclosures. This includes documentation related to all assets and debts in which either party has an interest.
If you believe your spouse may attempt to conceal assets, notify your attorney immediately. That way, they can review disclosures closely for any such deficiencies and trace any accounts or assets that appear incomplete or inaccurate.
Conferral
Conferral is an important aspect of every divorce. Before asking the court to intervene, both parties must attempt to resolve issues between themselves. After disclosures are exchanged and deficiencies are identified, you will need to reach out to your spouse or their attorney if they’re represented, regarding the identified deficiencies, and ask that the deficiency be cured by a certain date.
Motion to Compel
If your spouse refuses or fails to cure the deficiency, you can file a Motion to Compel with the Court. This motion should identify the deficiency, the attempts you’ve made to obtain this information, and a request for sanctions against the other party for failing to meet their duty to exchange disclosures. These sanctions may include the payment of attorney fees and costs, that negative inferences be made against the non-disclosing party, and that the non-disclosing party be barred from introducing evidence related to the non-disclosed asset at the hearing.
Discovery
Discovery is another useful tool to gain more information on any given asset. You or your attorney can propound discovery on your spouse, requesting additional information and/or documentation. This step can be especially helpful if you believe assets might be hidden, but you don’t specifically know what they are or where they’re held.
Subpoenas
Your attorney can issue subpoenas to financial institutions or third parties that hold the asset to request records if you have a reasonable belief about the existence or location of a specific asset. Subpoenas can be a powerful tool to obtain direct information that your spouse may not willingly disclose.
Third-Party Assistance
All of this said, you may still be thinking, “What do I do if I think they’re hiding something, but I don’t know what it is?” In some cases, your attorney may advise you to hire a third-party expert such as a forensic accountant or private investigator. These professionals specialize in asset tracing or asset investigation. When determining whether it is beneficial to retain a third-party expert, it is advisable to discuss the cost-benefit analysis with your attorney. Since these services can be expensive, it may not be advisable to employ such a professional unless you reasonably believe that the professional will be able to uncover significant assets that would materially impact the outcome of your divorce settlement.
Transfers to Others
Not uncommonly, domestic relations attorneys hear of scenarios where a spouse transferred a marital asset to another party, or you believe that your spouse has an interest in an asset that is not in their name. The circumstances surrounding this transfer are important when deciding what options you have available to you. If an asset was transferred long before the divorce was ever filed and there is no evidence that the transfer occurred with the intention of depriving the marital estate. In that case, it is unlikely that this asset will be considered marital. If the transfer occurred shortly before the divorce was initiated or after the divorce was initiated, or if there is evidence that it was transferred with the intent to deprive the marital estate, then pursuing additional discovery into this asset will be necessary to support the asset’s marital property.
If an asset is not in either party’s name and there is no other supporting evidence that your spouse has an interest in the asset, the court is unlikely to consider the asset marital for the purposes of the divorce.
Post-Decree Asset Discovery
What if you find out after the divorce has been finalized that an asset was not disclosed during the divorce? Pursuant to C.R.C.P. 16.2(e)(10), “If a disclosure contains a misstatement or omission materially affecting the division of assets or liabilities, any party may file and the court shall consider and rule on a motion seeking to reallocate assets and liabilities based on such a misstatement or omission, provided that the motion is filed within 5 years of the final decree or judgment.” If you discover a misstatement or omission of marital assets or liabilities, it is essential that you reach out to a domestic relations attorney right away, but not later than five years after your divorce decree was entered.
Contact Our Divorce Attorneys Today
Property division in a Colorado divorce can be complicated enough without the added burden of dishonesty or concealment. If you are facing a divorce and suspect that your spouse is hiding assets or debts, know that there are legal tools and strategies available to help you protect what is rightfully yours. Whether you’re still navigating your divorce or have concerns post-decree, Solutions Based Family Law can help you pursue the transparency and fairness you deserve.
We invite you to contact Solutions Based Family Law today to schedule a consultation and move forward with confidence.