Discovery & Negotiation

• Tracing & Finding Hidden Assets
• Preparing For Your Deposition
• Document Checklist
• Family-Owned Business Problems in Divorce

Tracing & Finding Hidden Assets

People can be very creative when it comes to hiding money.  Here are some signs to look out for:

1. The value of your assets looks lower than you remember.  It’s possible that your spouse anticipated the divorce and has been withdrawing cash or equity from a number of places – from the brokerage account or the equity line on the home.
2. Your spouse’s income looks oddly low.  One way to hide income is to take the step of asking an employer to increase withholding so that the next amount of the paycheck is lower.
3. Your spouse is reluctant to share information with you.  For obvious reasons, if your spouse resists your efforts to gather information, be alert.

In any case where you suspect improper conduct or less than full disclosure relating to the financial conduct or activities during the marriage, consider contacting us about retaining the services of either a  private investigator, or a forensic financial or computer expert.

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Preparing For Your Deposition

A deposition is your testimony under oath.  Opposing counsel will ask you questions.  Usually, an official court reporter records the proceedings including all the questions and answers.  The judge will not be present.  Usually, the deposition is taken in one of the attorneys’ offices.  There is little difference between the testimony at a deposition and the testimony in a courtroom trial except that a judge does not preside at a deposition and rule over the matters as they arise.

The opposing side is taking your deposition for three reasons:

1.  They want to discover what facts you have in your actual knowledge and possession about the issues in the case.  In other words, they want to know what your story is and what it will be at the time of the final hearing.

2.  They want to pin you down to a specific story.  This way you will have to tell the same story at the final hearing.  Through a deposition, they will know in advance what your story is going to be.

3.  They hope to catch you in a lie to show at the final hearing that you are not a truthful person.  This will cast doubt on your testimony, particularly the crucial and contested points.

These are very legitimate purposes and the opposing side has every right to take your deposition.  Correspondingly, you have the same right to take depositions of the opposing party and all witnesses.

While your deposition is being taken, be advised of these pitfalls you should be careful to avoid:

• Always remember that your only purpose is to give the facts as you know them.  You do not, however, have to give opinions.  Moreover, your attorney will object to a question that calls for an opinion, except for opinions which are related to your senses:  the speed of a car, one’s signature, sobriety, height, etc.

• Never state facts that you do not know.  Frequently an attorney will ask you a question and, even though you feel you should know the answer, you do not.  Do not guess!  This is not an IQ test, the other side is looking for information, but you need not answer if you do not know.  If you don’t know, don’t guess.

• Never attempt to explain or justify your answer.  You are there to give the facts as you know them and not to apologize or attempt to justify those facts.

• Do not, without the permission of your attorney, reach into your pocket for any kind of document or information.

• Review the top threats and tricks during a divorce and do not let the opposing attorney get you angry or excited.  This destroys the effect of your testimony and that may be to your disadvantage later.

If your attorney begins to speak, stop whatever answer you may be giving and allow the attorney to make his statement.

• Tell the truth.  Take as much time as you need to answer (the transcript of your deposition does not show the length of time used in considering your answer), but any lies or concealment of the truth will hurt your credibility in the case.

• Do not volunteer any facts that are not specifically requested by a question.  Think of the deposition as if you are on the witness stand.  Do not volunteer and do not elaborate.  You can answer questions with “yes,” “no,” I don’t know,” or, “I don’t remember.”

To learn more about depositions and other discovery strategy, go to our quick link on discovery devices.

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Document Checklist

In order to properly prepare for a case involving distribution of assets, both sides must identify all assets and ascertain their value.  Once you bring copies of the following documents to your lawyer, he or she will be in a better position to represent you zealously:

• Income tax returns for the past three to five years
• Income information, including payroll stubs and other evidence of income
• Personal property tax returns –from as early as possible, back to the beginning of marriage
• Banking information such as statements, check registers and cancelled checks
• Financial statements submitted to banks or lending institutions
• Loan applications made within the past five years
• Brokerage statements from all accounts including securities, commodities and mutual funds
• Certificates of stocks, bonds and mutual fund accounts
• Stock options records
• Pension, profit sharing, deferred compensation agreements and retirement records
• Wills and trust agreements
• Life insurance or certificate of life insurance policies
• General insurance policies
• Outstanding debt documents
• Records or ledgers – both relating to personal and business accounts
• Deeds of real property
• Sale and option agreements on real estate
• Personal property documents
• Firearm registrations
• Motor vehicle financing agreements and titles
• Corporate interests records
• Partnership and joint venture agreements
• Employment records
• Employment contracts
• Charge account statements – going back as far as possible
• Judgments and pleadings in which any of you has been a plaintiff or defendant
• Medical bills, prescriptions, evaluation reports or diagnoses going back three years
• Photographs or videotapes of real estate and contents
• Appraisals of any asset owned
• List of safe deposit box contents
  

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Family-Owned Business Problems in Divorce

1. Was it established before the marriage or after the marriage?

1. Did it grow substantially during the marriage?

1. Was such growth due to any support of the spouse not working full time in the business?

1. Was the separate property of either invested in the business?

1. Was it a joint enterprise run by both partners?

If any part of the business is to be considered marital property, a value must be placed on it.

Unfortunately, in a family-owned or small business situation, it is not uncommon for people to try to hide assets.  They may simply fail to disclose bank accounts, claim that an asset is less valuable than it really is, or make deceptive payments to a straw person to hide the money’s location.  Some of the most common ways that spouses hide assets from each other are:

• Fudging the books of a business to make it look less valuable than it is, or to show more accounts payable or payroll obligations than the business actually has

• Underreporting income on tax returns and financial statements

• Failing to identify or disclose retirement accounts

• Making secret agreements with employers to defer bonuses or pay increases until after the divorce is final; or, for someone who owns a business, delaying profitable deals or contracts

• “Repaying” fake debts to friends or relatives, thus appearing to reduce assets

• Putting friends or family on the payroll at work when they are not actually working

If your spouse owns a business, our Worcester Lawyers suggest that you hire a financial expert. 

You get the picture.  And unless you are in the same line of business as your spouse and know everything there is to know about the ins and outs of the specific enterprise, you will be well served by getting yourself some help in this situation.

If the business existed before the marriage, an accountant can also help you figure out what portion of the appreciation in value of the business occurred before the marriage and what portion occurred during.  This can be a highly technical calculation, and there’s little chance you could figure this out on your own!

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