Spouse Hiding Assets During A Divorce

What Happens If You Hide Assets During A Divorce

Are you concerned that your spouse hasn’t disclosed all assets during the property division phase of your divorce? What if this issue isn’t resolved until after your divorce is finalized? It’s necessary to understand the importance of disclosing all assets in a divorce proceeding, and it’s also valuable for spouses to know how the court is likely to handle a case in which one party failed to disclose certain property when the division of property already was underway.

A recent case from the Texarkana Court of Appeals suggests that it’s going to be difficult, although not impossible, to win a lawsuit for the post-divorce division of property.

In the recent case of In re: Ford, a husband and wife, Joe and Binnaabah, had been married for about 31 years and separated for about three years prior to the court’s entry of a divorce decree. Just about 2 months after the divorce had been finalized, Binnaabah discovered that Joe hadn’t disclosed all of his income from the last three years of the marriage (during which the couple was separated) for the purposes of dividing of marital property. She filed a lawsuit, but neither the trial court nor the Court of Appeals held in her favor.

The Court of Appeals emphasized that, under Texas law, a party like Binnaabah may be entitled to relief if the trial court finds that the other spouse (in this case Joe) committed “actual or constructive fraud” with regard to the community property. In this case, however, the trial court didn’t make such a finding.

Indeed, Binnaabah never expressly alleged that Joe had committed fraud. The Court also emphasized that, given the evidence presented in this case, it “cannot divide property that it’s unsure even existed at the time of the divorce, or now exists.” To be sure, the Court made clear that Binnaabah hadn’t presented any evidence that the income in question was “still on hand” at the time of the couple’s divorce or at the time in which Binnaabah filed her complaint.

Texas Law and the Post-Decree Division of Property

If you suspect that your former spouse failed to disclose assets during the divorce proceedings, what relief do you have under Texas law? Under the Texas Family Code, Chapter 9 governs post-decree proceedings. Within this Chapter, Subchapter C deals with the post-decree division of property.

Under Section 9.201, the procedure for the division of property not divided through the divorce looks like this:
Either of the former spouses can file a lawsuit to have the property in question divided and awarded appropriately.
However, there are some limitations to this law. Specifically, there’s a two-year statute of limitations. This means that, if a spouse wants to file a lawsuit to have previously undivided community property divided and properly awarded, she must file her claim within two years. The statute of limitations can only be tolled (put on hold) if there’s a period in which a Texas court didn’t have jurisdiction over the former spouses or their property.

Property division can be a complicated and frustrating experience. It’s important to have an experienced divorce attorney on your side. Contact Orsinger, Nelson, Downing, and Anderson, LLP to learn more about how we can assist you.

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