Part of every Minnesota divorce is a division of marital property. Sometimes there's little property to divide, and spouses work this aspect of divorce out on their own. More often, attorneys are involved in negotiating the division of assets and liabilities. Of course, in order to divide assets, they must first be identified, and occasionally this isn't as easy as one might hope. What should you do if you do not know a lot about your financial situation and you are planning to divorce?
Parties to divorce are entitled to information about the marital assets, and about any assets either spouse is claiming are nonmarital. Even if you were a stay-at-home spouse and your spouse brought in the bulk of the income during your marriage, any assets acquired by either of you during that time (with limited exceptions) are considered marital property. You have the right to know what those assets are. Only when you are confident that you fully understand your marital financial picture will you be able to confidently agree to a settlement.
Discovery is the name for a group of methods for you to legally gather information to support your divorce case. Informal discovery involves simply requesting and agreeing to exchange information. You and your spouse may agree to exchange sworn statements regarding assets and liabilities. Minnesota law also provides for formal discovery: you and your spouse can officially request documents from each other; request written answers to questions (interrogatories); ask each other questions face to face through your attorneys (depositions); admit in writing whether certain alleged facts are true. You can also subpoena information from your spouse or, more commonly, a third party. Requests for production of documents and interrogatories are among the most commonly-used discovery tools in divorce where informal discovery is not effective.
These tools can be targeted if you suspect your spouse is concealing assets. You can ask questions directly about whether the spouse has opened an account in their name or anyone else's name, for instance, and request them to produce all statements for such accounts for a given period of time. However, it is not very common for spouses to attempt to conceal assets, so beware of spending thousands of real dollars to chase down assets that don't exist.
If you are concerned that your spouse is hiding assets, here are some things to consider: Is your spouse suddenly paying creditors you didn't know they had, or paying more than they need to? Has your spouse's income gone down recently without a good explanation? Have financial statements for accounts you've had for a while stopped coming in the mail? Are your monthly household expenses higher than the income you believe to be coming in, yet you're somehow making ends meet? All of these are red flags. Your spouse may be deferring income until after the divorce or funneling it into an account you don't know about.
There are penalties to a spouse who deliberately conceals income or assets during a divorce—but only if they get caught. Some people decide the payoff of possibly not having to divide an asset outweighs the risk of losing it. A skilled attorney can make the difference in helping to identify assets a dishonest spouse is determined to hide. Sometimes, the assistance of a forensic accountant may be called for, especially if marital assets include a small business or significant investments.
If you'd like to learn more about how an attorney can help you identify, locate and value assets in your Minnesota divorce, we invite you to contact Bloch and Whitehouse, P.A. at (952) 224-9977 to schedule a free initial consultation.