Your spouse may try to hide assets, but most people are not very good at it: they usually leave trails that can be followed. There are two steps for you to take:
It is not uncommon for owners of closely held businesses to get a disease called “RAIDS” (Recently Acquired Income Deficiency Syndrome). Information will come from your discovery process and the valuators’ site visit and interview with management or through deposition. You will want to obtain credit reports on the spouse, his bank statements, canceled checks (front and back), deposit slip details, debit and credit memos, check registers, signature cards, monthly credit card statements, applications for credit cards or checking accounts, loan applications, etc.
With respect to the business, you will want to obtain items such as: detailed general ledgers; cash disbursement journals; payroll records; copies of contracts for services; lease agreements; bank statements; deposit slips; credit card statements; loan files; any brokerage statements; telephone records; etc. Also, obtaining the individual’s gift tax returns may be helpful in identifying assets that have been transferred. Once you obtain this information, a financial expert can use various techniques to ascertain the property-owning spouse’s true economic income and the true worth of the company. The professional will look for your husband’s perks, compare the changes in his net worth, and pay a close attention to his lifestyle in the search for hidden assets and the development of his true economic income.
Though he may have never told you anything directly before, the way you live will tell a lot. Plus, you will learn a lot by the time discovery is finished. Don’t worry, stay focused, and get good qualified professionals as part of your team.
Since 1980, Bruce Richman (CPA/ABV, CVA, CDFA™) has been actively involved in valuations, mergers and acquisitions and other financial and tax consulting matters. In his current position, Mr. Richman is responsible for various valuation projects and consulting services in the United States and, for U.S. clients, internationally.