It is not unheard of for a spouse to maintain a “hidden stash” of money about which the other spouse is unaware. Some spouses do so while trying to pay off embarrassing debts that their partner does not know about, or to help a family member that their spouse might not like. However, some hide money from their spouse in contemplation of divorce.
Generally speaking, anything that you or your spouse make during your marriage is considered community property and belongs equally to both of you. In Texas, hiding any such money from the other spouse is considered “fraud on the community” and spouses who engage in this fraudulent conduct may face serious consequences in court. Common methods of hiding such community property money include: direct depositing a raise or bonus into a “secret” bank account; overpaying taxes for a larger return in the future; and using community property money to cover phony expenses of a family-owned business.
Sometimes an individual might not suspect that their spouse is hiding money until a divorce has already been initiated. If there is any question regarding whether assets or money have been concealed, the innocent spouse should wait before signing any settlement agreement, as doing so could have negative long-term consequences. For example, if an individual agrees to a 50/50 split of the assets, but their spouse did not disclose a hidden bank account in the agreement, the “defrauded” spouse may have relinquished any claim to money from that account. Before agreeing to a divorce settlement, spouses who have concerns about hidden money or assets should hire attorneys to conduct discovery. Discovery is a legal process by which spouses may be required to produce statements of their earnings, investments, savings, and more, and can be an optimal way of exposing hidden money or assets. If you are considering divorce or if you believe that your spouse is concealing money or assets, please contact Kirker|Davis for a consultation.