Portrait of John K Grubb

Texas Divorce and Prenuptial Agreement

5005 Riverway Drive, Suite 450 • Houston, Texas 77056

Phone: 713-877-8800 • Fax: 713-877-1229

Artwork, Fake Payees Are Common Problems During Divorce

Whether they are deliberately hidden or innocently neglected, assets that fail to appear on a spouse’s financial disclosures at divorce time hurt the other side. By failing to include these assets, the total amount of the couple’s marital property will be less than it should. In this post, we discuss several of the ways that spouses have hidden assets that could have improved the financial well-being of their ex-spouses following the divorce.

Illiquid assets like jewelry and artwork

Unlike a highly liquid asset like stock, illiquid assets cannot be easily and quickly sold for cash. Publicly traded stocks are easy to sell for cash; the stock market values them by the second, and it is possible to arrange a sale usually by a simple click of a computer mouse. Illiquid assets like artwork, on the other hand, are not so easy to sell. These assets require expert appraisals and then usually a private sale or auction. Due to the nature of these illiquid assets, spouses can take advantage of their uncertain value when it comes to divorce time. Spouses may use outdated or grossly incorrect values for these assets, thereby shortchanging their soon-to-be ex-spouses out of the difference between the stated value and the asset’s actual value today.

Fictitious and illegitimate payees

Spouses can use a variety of financial methods to make a transaction appear to be something other than what it really is – an asset that the spouse is trying to avoid having included in his or her marital estate at divorce time. Be wary of the following types of transactions:

  • Spouses transferring assets to a custodial account on behalf of a child
  • Payments made to family members and friends for debt or business that suddenly started occurring

Did undervalued collectibles or suspect financial transactions lead you to believe that your spouse was hiding assets during your divorce?

John K. Grubb & Associates, P.C. – Houston divorce lawyers

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