How Soon Should You Start a Divorce Asset Search?

If you’re thinking that you may be divorced in the near or medium term, the answer isn’t necessarily “start now,” but it’s not too early to start organizing your information.

Step 1: What Do I Know, and What is Missing?

It’s never too early to be truthful with yourself and if necessary, to admit that you have no idea how your spouse is compensated and what your spouse’s (and your) extra money may be invested in. In the past several years we have seen the following:

• A husband who worked for a large, well-known financial planner. You would think he had a single pay slip, but you would be wrong. He was also licensed to sell insurance, and was compensated by several different group companies.
• Another husband had his own insurance agency, but paid himself through three different companies he had set up – one of which was created around the time he filed for divorce.
• One wife correctly named the six properties that she and her husband owned, except for one thing: He no longer owned one of them. He told her he did, but then sold the property to a company owned by his mother one week after the purchase. In addition, one of the properties she knew about was owned by a company he controlled, and that company also received tens of thousands of dollars in revenues from his consulting contracts. The contracts paid him something personally, but securities filings showed that 80 percent of the payments went to this company. The wife knew about the company but the husband told her it was dormant.

Step 2: If I Need an Asset Search, What Does it Cost and Will My Spouse Find Out?

If all we are looking at is public records, there is no reason the spouse would find out we are looking. Many divorce asset searches take two weeks and cost in the range of $3,500 to $4,500.

Remember, unless your attorney gets a court order or issues a subpoena, there is no legal way to get access to bank accounts. But consider the above examples – none of these involved looking at any bank accounts at all. Your spouse will know if you are legally looking at their accounts, but not if you have someone looking at public records anyone is allowed to see.

Step 3: Litigation and the Possibility of Forensic Accountants

Once you are in the thick of a divorce action (the case is filed and you have the ability to subpoena documents) some divorces require a forensic accountant. If your investigator discovers three companies you never knew about and those companies turn out to have complex cash and asset profiles, you may need a forensic accountant to sort it all out and then perhaps testify that money is missing. Lawyers and forensic accountants will nearly always cost a lot more than an investigator.

Part of that extra cost is because lawyers and accountants usually need more time to do their jobs. Divorces can take years, but an investigation takes weeks, and even subsequent phases in a complex divorce won’t approach the time your lawyer and accounting experts may need.

So think early about an investigation. Even if you are not ready to hire anyone yet, giving the investigator as much information as possible will get things going more quickly and will save you money. With enough good information early on, you can speed up the other side’s decision to offer you a settlement you can live with. That can eliminate the need for an expensive and stressful trial.