In an Arizona divorce, state law requires that all property acquired during the marriage is to be divided equally between the spouses, with certain exceptions such as inheritances or gifts received individually. Both spouses are obligated to make a full and honest disclosure of all their assets and debts. Problems arise when either spouse fails to do so or — worse still — actively attempts to hide assets.

If a spouse is suspected of failing to disclose or concealing assets, the other spouse can take legal action. If hidden assets are discovered before the divorce is finalized, the court can impose sanctions, adjust the property division to compensate the wronged spouse and order the deceptive spouse to pay legal fees and other costs incurred during the search for hidden assets. 

To uncover concealed assets, parties in a divorce can use the discovery process, a legal mechanism that allows them to request and obtain relevant information from each other. The discovery process is vital in building a complete financial picture and ensuring transparency. Several tools are available to assist in this process:

1. Uniform interrogatories — Uniform interrogatories are a standardized set of questions that each party must answer under oath. These questions cover various financial topics, such as income, investments, expenses, debts, and assets. Interrogatories provide a starting point to identify discrepancies or uncover concealed financial information. Since responses are given under oath, any falsehoods can lead to legal repercussions, such as perjury charges.

2. Requests for production — Requests for production require the opposing party to provide specific financial documents. These may include tax returns, pay stubs, bank statements, credit card statements, social security records, and investment portfolios. Such documentation is often critical in identifying hidden income or assets. For example, discrepancies between reported income and spending habits might reveal undeclared accounts or income sources.

3. Inspection demands — Inspection demands grant access to physical property, such as safety deposit boxes or items of significant value like antiques or jewelry. This tool is useful for identifying high-value assets that may not appear in financial documents but are part of the marital estate.

4. Subpoenas — Subpoenas are court-backed orders requiring individuals or entities to produce documents or testify. They are particularly effective in uncovering hidden assets held in third-party institutions, such as banks, investment firms, or businesses. Subpoenas can compel the disclosure of account details, property records, or other relevant information that may be beyond the direct reach of the opposing party.

An experienced family law attorney can be effective in dealing with hidden-asset situations. An attorney can identify red flags of asset nondisclosure and take actions to enforce compliance. In cases where hidden assets come to light after the divorce decree, the court may reopen the case and modify the property division.

Clark & Schloss Family Law, P.C. is a full-service family law firm in Scottsdale, Arizona, representing people throughout Maricopa County in all aspects of divorce proceedings. Contact us online or call 602-789-3497 for a consultation.