How Might a Small Business Owner Try to Hide Assets in a Texas Divorce?

 Posted on May 30, 2022 in Division of Assets

Divorcing spouses in Texas must work together to negotiate important issues like child custody, alimony, and asset division. Because of the importance of these issues, and because spouses must provide testimony and evidence to a court, spouses are expected to act with honesty and integrity during the negotiation process.

Unfortunately, this does not always happen. Many people see divorce as a zero-sum situation where, if one party gains something, the other party loses. This mindset is especially prevalent during negotiations involving money; many spouses will try to hide cash, collectibles, or investments during divorce and then recover the hidden assets once the divorce is over. This is especially easy to do when one spouse is a small business owner because a couple’s marital assets are often mingled with a small business’s income and expenditures. If you are divorcing a spouse with a small business, here are five places to look for hidden assets.

Common Small Business Owner Asset Hiding Strategies

Just because a business is a “small business” does not mean it cannot bring in a hefty amount of cash and profits. Some ways to conceal cash in a business include:

• Paying too much in taxes - Small business owners often need to prepay taxes, so someone may try to overpay in taxes knowing he or she will get the overpaid amount back after next year’s tax return.
• Hiring fake employees - A business owner may hire several fake employees, write them checks, and then never cash those checks, making the business’s ledger appear to have a lower balance than it really does.
• Accepting cash payments - If a customer pays in cash, what stops the business owner from just pocketing the money without reporting it?
• Asking clients to defer payments - Deferring payments makes the business look like it has less income and cash on hand and allows the business owner to retain the full value of the payment after the divorce is over.
• Deliberately undervaluing assets - Even though a business owner may hire a financial specialist who claims an asset is worth a specific amount if the amount seems low, you may want to take a second look, especially if the financial specialist is a friend of the business owner.

Call a Dallas, TX Marital Asset Division Lawyer

For help ensuring you have a fair divorce agreement that includes all marital property, contact the skilled Dallas County divorce attorneys with Clark Law Group. If you suspect your spouse may be hiding assets, we will investigate, gather evidence, and ensure you have the full property settlement to which you are entitled. Call us today at 469-906-2266 to schedule your initial consultation.

Source:

https://statutes.capitol.texas.gov/Docs/FA/htm/FA.7.htm