Chasing Divorce Assets, Part 1
Tracing Hidden Assets and Income
This four-part blog series addresses the sourcing of money and property in divorce proceedings to discover hidden assets and income, distinguish separate property from marital property and enforce or attack prenuptial agreements.
Tracing Hidden Assets and Income
Initially, asset tracing depends upon the voluntary disclosure of information from each spouse. If spouses suspect that money and property have been diverted from the assets disclosed in financial affidavits and discovery into hidden or foreign assets, divorce lawyers may serve document requests, interrogatories, and depositions to investigate the existence of hidden and foreign investments.
The common investigation requests below typically seek information for the current and past two calendar years:
- Produce records of all income and cash flow not reported in your (federal and state) income tax returns such as gifts, loans, prizes, gambling winnings, reimbursements, municipal bond interest, benefits and subsidies from agencies, tips, inheritance, scholarships, distributions from a trust
- Produce your FinCEN 114 Reports of Foreign Bank and Financial Accounts (known as “FBARs”). U.S. citizens are required to file FBARs with the Treasury Department (not IRS) when they own one or more foreign bank accounts with a combined value of $10,000 or more at any time during the calendar year. IRS Form 8938 is another useful tool for discovering foreign assets.
- Provide account details and inventories of contents for any safe deposit boxes, vaults, safes or other places of deposit held in your name, or to which you have had a right of access
- List account details for all peer-to-peer mobile payment transfer accounts to which you subscribe for personal and/or business use such as AliPay, ApplePay, PayPal, SquareCash, Venmo, WeChat, Zelle
- List account details for all cryptocurrency and blockchain accounts and wallets to which you subscribe for personal and business use such as Bitcoin, CashApp, Coinbase, Kraken
- Describe any current or future interest (including “transfer on death” or joint tenancy with rights of survivorship) in jointly titled property, including real estate, bank or investment accounts, stock, securities, savings bonds, certificates of deposit
- Provide details on any real estate owned (directly or through partnership, corporation or LLC) outside of the United States
- Indicate if you may be subject to monetary import and export restrictions with the United States. Have paid or received funds in the U.S. to satisfy an obligation or collect a debt incurred in a foreign country? Have you imported goods into the U.S. that were purchased with funds earned or acquired in a foreign country? Have you participated in the EB5 investor immigration program?
Tracing assets presents numerous challenges, particularly in today’s age of electronic payment systems and global banking. To review your unique circumstances with an experienced Pittsburgh family law attorney, call Pollock Begg at 412.471.9000.
With an MBA and more than two decades of experience handling complex financial affairs, Partner Brian C. Vertz excels at cases involving assessment of personal assets including premarital wealth and trusts, valuation of closely held businesses, executive compensation, medical and dental practices, and complex child support litigation. Brian was selected as the Pittsburgh 2019 Lawyer of the Year for family law through The Best Lawyers in America peer review process.