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What if your spouse is caught hiding assets during your divorce?

On Behalf of | Feb 28, 2019 | Property Division |

Texas is a community property state, meaning the court divides a divorcing couple’s shared assets in a manner that it deems fair. In an effort to tip the coffer in his or her favor, your spouse may, unfortunately, take steps to hide assets from the divorce process. If caught, however, this could have a serious impact on the outcome of your case.

During your divorce, you and your spouse may be required to disclose your assets and debts, including those you share and those that are yours alone. Hiding assets during the divorce process, or neglecting to report them, is known as fraud against the community.

According to state law, when this type of illegal conduct is found, a judge will determine what the value of your marital estate would have been if your spouse had not hidden assets. This value is known as the reconstituted estate. To calculate the reconstituted estate, the judge will figure the amount by which the fraud diminished your marital estate. That amount is then added to the marital estate as you and your spouse originally disclosed it.

Once your reconstructed estate has been calculated, the judge will divide it in accordance with the state’s community property law. In determining what is just and right, though, the court may consider the fraudulent conduct and is entitled to provide equitable relief. According to state law, you may be the portion of your shared assets that you would have received if the fraud had not occurred, a monetary judgment in your favor against your spouse or both.

This information is intended to educate only and should not be taken as legal advice.