Guest Post – Lifestyle Analysis in Divorce Proceedings: Uncovering Hidden Assets

Posted on by stilllearning2b

I felt like I was blindsided twice in my divorce – first by my husband and then again by the courts. The court system is overwhelming, the process is scary and the outcomes are potentially life-altering.  This information and advice from an attorney who has been there, done that may help you go into your divorce better prepared than I was and with a better outcome than I had.  I hope so.

—–

Lifestyle Analysis in Divorce Proceedings: Uncovering Hidden Assets

Divorce, or dissolution of marriage, is a highly personal, emotional experience that goes much smoother if the parties are willing to cooperate. Despite the obvious benefits of working together, divorce remains a fairly adversarial process that can sometimes get downright malevolent. Whether you are the spouse filing for divorce or the spouse responding to a divorce action, you should consult a lawyer to make sure you are aware of all your legal rights and obligations. This is especially important if the other party is being difficult. One of the most significant aspects present in every divorce where an attorney’s advice can make a big difference is in reviewing financial matters.

 

The Financial Affidavit

All divorce proceedings, whether contested or not, require each party to complete a financial affidavit that discloses all assets, income, expenses, and liabilities. These affidavits are known by different names, such as “Verified Financial Disclosure Statement” in Indiana, and “Verified Disclosure Statement” in Kentucky. No matter what they are called in your state, they must be signed under penalty of perjury that the information provided is correct.

 

The financial affidavits are essential to the final divorce settlement agreement because they are the basis for deciding child support and property division, and whether one spouse is entitled to maintenance. The affidavits are usually prepared by the client, many of whom take wild guesses at the figures. Thing is, it’s human nature to estimate incorrectly, especially under stress. But because complete accuracy now can make a big difference in your financial future, it may be wise (or even court-ordered) to complete a lifestyle analysis.

 

The Lifestyle Analysis

In contrast to the financial affidavit, which gives a view into an individual’s finances at a certain point in time, a lifestyle analysis examines several years of financial activity. It looks at the couple’s spending habits along with the day-to-day living expenses incurred during their marriage. The focus is usually on the last three to five years of marriage in order to get a good understanding of patterns, although the longer the time period analyzed, the more credible the report.

 

The idea is a fairly basic one: if what is being spent on a lifestyle is more than the income that is reported, then it is likely there is another source of income. The analysis usually includes, but is not limited to, researching:

  • Bank records
  • Checkbook registers
  • Credit card statements
  • Credit reports
  • Insurance documents
  • Loan applications and agreements
  • Pay stubs
  • Payroll records if spouse is a business owner
  • Personal and business income tax returns
  • Property tax bills
  • Recurring and ordinary expenses within larger basic categories such as clothing, food, housing, entertainment, travel, etc.
  • Retirement accounts
  • Seasonal expenses
  • Unusual or non-recurring expenses.

 

There are many different reasons why this documentation and verification of expenditures during the marriage may be needed. The most common reasons are to determine the standard of living during the marriage and to determine the appropriate levels of child support and maintenance. A lifestyle analysis can also be very useful in determining whether a spouse is underreporting income on the financial affidavit, has concealed assets, has overstated debts, or has spent marital monies on activities that could influence the case (such as gambling, drugs or paramours).

 

While it can sometimes be hard to determine whether a lifestyle analysis is warranted, there are certain red flags that can signal the need to take a closer look. In many instances, one spouse is already suspicious of the other before they are even separated. Any spouse that exerts excessive control over financial matters should be more thoroughly examined as someone who is likely to manipulate financial facts. A spouse with a history of deception, or of pressuring or coercing the other to sign unusual documents, is a prime candidate for analysis. Has your spouse made large purchases without your knowledge? Have large sums of money disappeared without plausible explanations? These are signs that may indicate the need for a more careful evaluation.

 

Hidden Assets

It’s possible that during the process of completing the financial affidavit or the lifestyle analysis you may discover that your spouse has a financial secret. Comprehensively investigating financial records may reveal that he or she has been hiding income, selling marital assets, buying property, or even bankrolling an extramarital affair. Once exposed through the analysis, this deception can be taken into consideration when the judge determines the divorce settlement agreement.

 

Concealed assets are typically either placed in the hands of third parties or behind false documents. Common ways of hiding assets include:

  • Bearer municipal bonds
  • Collectibles, possibly kept at a friend’s house or the office
  • Converting cash into personal property that may be overlooked or undervalued
  • Custodial accounts established under a child’s social security number
  • Delaying work bonuses, raises, contracts or stock options until after the divorce
  • Faking debts owed to family or friends
  • Giving gifts (like jewelry or cars) that are to be returned once the divorce is finalized
  • Offshore accounts
  • Safety deposit boxes
  • Secret retirement accounts
  • Series EE savings bonds
  • Transferring money into trusts.

 

The point of identifying and valuing all the assets is to decide which marital property is subject to division, thereby allowing an equitable apportionment. A spouse who deliberately hides assets can face a number of consequences, including being charged with fraud, ordered to pay the other party’s fees, having his or her claims dismissed, or having the other party be awarded the entirety of the hidden assets. Penalties vary from state to state and are heavily dependent on the circumstances of the case.

 

Seeking competent and knowledgeable legal advice now will help you avoid costly, long-term mistakes. In order to make certain that you receive and retain all the assets to which you are entitled after a divorce, it is important to talk with a skilled divorce lawyer. In extremely complex situations, divorce lawyers may enlist the assistance of other professionals who have specialized training and expertise in investigating the financial intricacies of a divorcing couple. Financial advisors, CPAs, forensic accountants, and Certified Divorce Financial Analysts® are some of the professionals who may be consulted. It can sometimes take a team to help a spouse stay on the right side of the law while working to secure his or her financial future.

 

About the Author:

Dana Eberle-Peay is a family attorney in New Albany, Indiana. After going through a tumultuous divorce in 2008, Dana dedicated her professional life to helping others in similar situations. She currently practices law at the McNeely Stephenson Law Offices of New Albany, Indiana.

Lose Your Illusion

Posted on by stilllearning2b

(Any Guns ‘n Roses fans smiling at the title?)

Illusion
Illusion (Photo credit: Nikos D.)

Brock and I caught the second half of a show on Discovery last night about how easy it is to fool the brain. The first segment we saw had volunteers sitting at a table with their right arms hidden from sight behind a screen. A fake arm was then placed on the table in front of them. The researcher went through a few steps (I didn’t see the beginning, so I’m not sure what all this entailed) to make the participants connect with the fake arm. Then, the researcher slammed a hammer down on the plastic arm. Most of the volunteers jumped. Makes sense. Slam a hammer down in front of me and I’ll startle too. The interesting part, however, was that the majority of the participants claimed to feel pain in their fake hand. The brain was relying on the visual clues and was fooled into believing that the plastic substitute was indeed the real thing.

The brain’s fallibility goes well beyond parlor tricks. The brain is an expert at filling in the pieces, at seeing or hearing what it expects to see or hear and at creating a narrative to make sense of any input. We are not normally conscious of this effect; it happens quickly and automatically. In the case of the situations presented by the show, the illusions were inconsequential. It doesn’t really matter if your brain interprets wet rags on plywood as the sound of raining hamburgers in Cloudy With a Chance of Meatballs. I don’t think that misconception will impact your life one way or another. (I apologize if having this auditory trick revealed causes you any mental distress.)

That’s not always the case, however. When you take the brain’s innate tendencies to misinterpretation and to complete gaps with its own information and you add in all of the messy emotions of the human experience, you have a situation that can lead to trouble. We all live in a land of illusion to some extent. On a biological level, it is impossible to process every single piece of information that our senses are bombarded with every second. Our brain takes shortcuts. It makes sweeping generalizations. It has to. On an emotional level, we can try to be empathetic but we can never truly understand another’s perspective. We see the world through our own fallible filter.

The trouble comes when the illusions go too far. When we stubbornly act as though our fake-arm belief is the truth even when the screen hiding the reality is removed. It’s easy to believe our own narratives even when they are disproved. Manti Te’o held onto the belief that his girlfriend was real even though she never materialized in real life. Lance Armstrong refused to come clean about doping even when evidence to the contrary was produced. My ex husband failed to see his actions as wrong even when he was sitting in a jail cell.

To those of us on the outside, it seems so clear, so obvious. But that’s because it’s not our illusion. We are the bystanders who can see both the real arm behind the screen and the false one in front. It’s so difficult to see our own illusions. The mind puts up such strong defenses. It hates being wrong. Once it has decided on a narrative, it will work tirelessly to find and filter information that supports its conclusions.

My ex husband’s need to maintain the illusions was so strong that he attempted suicide soon after being released from jail. A couple of days later, he reached out to my mother via text. A brush with death had the effect of removing the screen for a brief period. One response of his really stands out:

I tried to create a world where I convinced myself that everything was somehow fine no matter how bad things looked. As crazy as it sounds I believed my own bullshit and just deluded myself into believing that everything could be ok.

Again, from the outside, it seems so clear. How could he believe that everything could be okay when he spent every penny he could find, lied to everyone around him and committed bigamy? It seems crazy. Yet there I was in my own illusion, believing that my husband was honest and loving. My mind also refused to see the truth behind the screen.

So, what do we do? Are we captive to these minds of ours that seem hell-bent on fabrication? Well, yes and no. It’s impossible not to fall sway to any illusions. Even by the end of show last night, I was still fooled by most of the tricks even though I knew they were there. We cannot stop our minds from filtering information selectively and reaching conclusions based on experience. What we can do is let go of the assumption that we are always correct. We can be open to the thought that maybe what we are experiencing isn’t reality. We can strive to see with our eyes rather than with our presumptions. And, we can summon the courage to remove the screen once we become aware of its existence. Just make sure you watch out for any hammers coming your way.

 

 

A Strange Place to Be

Posted on by stilllearning2b

Note: If you are not familiar with my basic story, please read this first so you have some context.

I received an email the other day from someone, let’s just call him P, proposing an opportunity that would be very beneficial for me as a writer (chugging away on the book every day!!!) and as a wellness coach.

There was one caveat – he would need to locate my ex-husband.  After some deliberation, I agreed and I sent him the contact information that I have.  I also informed him that, as of the last I knew, if you Googled my ex’s name along with the limiting and somewhat giggle-inducing keyword, “bigamy,” you would pull up some articles from 2009 as well as his mugshot.

I kept up with my ex’s whereabouts until the divorce was final, in March of 2010.  I promised myself at that point that I would never look him or his wife up again.  I have held fast to that promise.

Two days after sending P the contact information, I spoke to him on the phone.  He had not had any luck in locating the ex (which I expected), but he did say something that caught me short.

“I did Google his name and I found the articles from 2009 and the mugshot.  I also found some articles from 2010 and 2011.”

Whoa, Nelly.  There’s new information out there.  I think P sensed that I did not want to know the content of what he found and so he did not reveal the nature of the articles.

He then made another comment that was interesting.

“We can’t do this if there are any open cases against him.”

Hmmm…so I guess he has continued his life of crime?  My first thought was for his wife.  I have had a genuine concern that he would try to kill her.

Luckily, that did not seem to be the subject of the articles, as P then said maybe they could locate the wife (ex-wife?) in his place.  I agreed, and gave her (also outdated) contact information.

It’s been several days, and I have not heard from P.  I doubt that either one of them is easily found and willing to share their stories.  Meanwhile, it leaves me in strange place.  I know there is information out there.  I feel like I should be curious.  But, I’m not.  I haven’t wanted to search, haven’t had to check myself to keep from typing his name into Google.

Who knows what will become of this little detour in my saga – will he be found?  will she turn up?  will this opportunity pan out for me?  Who knows…  Regardless, I see my reaction to this as a sign, a sign that I really have moved on.

Note: For any of you that know me personally and know his name, if you choose to do a search, please do not share what you learn.  I really don’t want to trigger the desire to keep up with him again.  Thank you:)