Finding “Forgotten” Assets in High-Net-Worth Divorces

Navigating a high-net-worth divorce is inherently challenging, given the complexity and breadth of assets involved. Beyond the emotional strain, one of the most intricate aspects is ensuring a fair division of all marital property. Often, high-net-worth individuals have diverse portfolios, including investments, real estate, business interests, and other valuables. Unfortunately, it is not uncommon for some assets to be forgotten, intentionally hidden, or even obscured through financial fraud. At Kaspar & Lugay, LLP, we specialize in uncovering these assets to protect our clients’ financial futures.

The Importance of Identifying All Assets

In high-net-worth divorces, assets are often diverse and include investments, real estate, business interests, and valuable personal property. The more property you have, the more challenging it can be to track it all. Over the years, couples might have acquired numerous investments or properties, some of which may not be immediately apparent during divorce proceedings.

Identifying all assets is crucial because any overlooked asset can lead to an unfair distribution. Both parties are entitled to a fair share, and missing assets can significantly impact the final settlement. Ensuring that every asset is accounted for requires diligence and expertise, which is where the assistance of a seasoned family law firm becomes invaluable.

Commonly Overlooked Assets

Several types of assets are frequently overlooked in high-asset divorces. Some of the most common include:

1. Stock Options and Restricted Stock Units (RSUs)

Executives and high-ranking employees often receive stock options and RSUs as part of their compensation packages. These accounts can be challenging to value and easy to forget, especially if they have not yet vested.

2. Deferred Compensation Plans

Many high-asset individuals participate in deferred compensation plans. These plans can include bonuses or salaries that are set aside to be paid out at a later date, often for tax purposes. Deferred compensation can be a substantial asset that must be considered in a divorce.

3. Cryptocurrency Holdings

With the rise of digital currencies, cryptocurrency holdings have become a significant asset class. Due to their decentralized nature, these assets can be easily hidden or forgotten if not properly disclosed.

4. Business Interests

High-net-worth individuals often have ownership stakes in private businesses. These interests can be particularly challenging to value and easy to overlook without thorough investigation.

5. Foreign Assets

Investments in foreign real estate, offshore bank accounts, or international business interests can be difficult to track, especially if they were not disclosed during the marriage.

6. Collectibles and Valuable Personal Property

High-value items such as artwork, antiques, jewelry, and luxury vehicles are often forgotten or undervalued. Proper appraisal of these items is essential for an equitable distribution.

Uncovering Financial Fraud in Divorce

Financial fraud is a significant concern in high-asset divorces. Spouses may go to great lengths to hide property, underreport income, or overstate debts to skew the division of property. Understanding and identifying financial fraud is critical to ensuring a fair settlement. Here are some common tactics used in financial fraud during divorce:

1. Underreporting Income

One common tactic is underreporting income to make it appear that there is less money available for division. This can include hiding bonuses, commission checks, or other forms of compensation.

2. Creating Fake Debt

Some individuals may create fake debts or inflate existing debts to reduce the apparent value of the marital estate. This can include loans to friends or family members that never actually occurred.

3. Transferring Assets

Transferring assets to friends, family members, or business associates to hide them from the divorce process is another common tactic. These transfers can be temporary, with the intention of reclaiming the property after the divorce is finalized.

4. Hiding Assets in Complex Financial Instruments

High-asset individuals may use complex financial instruments, such as trusts or shell companies, to hide assets. These instruments can be difficult to trace and require expert investigation.

5. Manipulating Business Records

For those with business interests, manipulating business records to underreport profits or hide assets is a common tactic. This can include keeping two sets of books or delaying lucrative contracts until after the divorce.

The Role of Forensic Accountants

Forensic accountants play a crucial role in high-asset divorces by helping to uncover hidden or forgotten assets. They have the expertise to trace and identify property through financial records, tax returns, and other documentation. Forensic accountants can also evaluate the value of complex assets like business interests or stock options, ensuring that all items are accurately assessed.

Legal Strategies for Finding Forgotten Assets

At Kaspar & Lugay, LLP, we employ several strategies to uncover all assets in a high-net-worth divorce:

1. Detailed Financial Disclosure

We request comprehensive financial disclosures from both parties. This includes tax returns, bank statements, investment portfolios, and any other relevant financial documents. By thoroughly reviewing these documents, we can identify any inconsistencies or missing items.

2. Discovery Process

During the discovery process, we can issue subpoenas to obtain financial records from banks, investment firms, and other financial institutions. This can help uncover hidden assets that one party may be trying to conceal.

3. Depositions

Depositions allow us to question the other party under oath about their financial situation. This can be an effective way to uncover hidden funds, as any false statements can have legal consequences.

4. Utilizing Expert Witnesses

In addition to forensic accountants, we may also work with other experts, such as real estate appraisers or business valuation specialists, to ensure that all assets are properly valued and accounted for.

Protecting Your Interests

Navigating a high-asset divorce requires a strategic approach and a thorough understanding of complex financial matters. At Kaspar & Lugay, LLP, we are dedicated to protecting your interests and ensuring that you receive a fair and equitable settlement. Our experienced attorneys work diligently to uncover all assets, provide expert valuation, and negotiate effectively on your behalf.If you are facing a high-net-worth divorce, don’t leave your financial future to chance. Contact Kaspar & Lugay, LLP, today to schedule a consultation and learn how we can help you navigate this challenging time with confidence and peace of mind.