EP 190: How to Get Access to Your Financial Information in Divorce

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Thank you for listening! Find a transcript of this episode below.

Most of the information on this podcast is focused on leveling the playing field in divorce and making sure that if you aren’t the person who was in control of the finances, that you make sure that you’re able to get the information you need so you can create and structure a reasonable settlement for the rest of your life and ultimately, to put it bluntly, so you don’t get screwed, as they say, in the divorce process. As part of that, and part of the coaching calls that I do every week, one of the recurring themes is that many times you don’t have access to essentially information that you’ll need so that you can make an informed decision about your financial picture and what the best things are for you to do.

One of the things I want to discuss in this episode is a few ways to get the appropriate financial information in your divorce and make sure that you have a clear and full financial picture. This could be for many reasons and many situations this comes up. Sometimes your spouse is deliberately hiding assets and hiding money from you or misstating your financial picture. That’s a very common one., sometimes in a small way, sometimes in a big way. Sometimes it could be the case that your spouse made a mistake and forgot about something. Or maybe you have a complicated financial picture and there are just a lot of different moving parts that you have to keep track of. Or maybe you just didn’t really even know what existed and you’re just trying to get a sense of what actually do I have. You’re just trying to figure out the whole thing and get some information.

What I want to do in this episode is go through some specific tactics to help you get a clearer financial picture of what you have and what you need so that you, and your attorney, and perhaps me if I’m working with you, you can make those informed financial decisions or at least the things in this episode, I want to help you start to figure out where to look so that you can start digging and start getting on the right path financially. I’m going to go through five tips, tools, tricks, whatever you want to call them, in order to help you get financial information in your divorce if you don’t have direct access to it otherwise. Five things. The first one is ask. Second is check your tax return. The third is use your memory or any clues that you may have. The fourth is a subpoena. Finally, the last one is using a forensic accountant. The forensic accountant is going to be last because it’s a combination of many of these things.

Let’s jump in and go through these tactics. The first one, as I said, is you just need to ask. Sometimes if you ask the question, “Hey, can you provide the latest account statements for this retirement account, or this mortgage, or this whatever?” either through your attorney or in writing in some manner, your spouse will do so. I always encourage people to ask in writing with any specifics you may have because it’s good to have a record of times if your spouse doesn’t comply. It’s nice to have a record of all of the times you’ve asked and all of the times they have not provided full and complete information because that will look bad to them later on. You always start with an ask. Asking is easy, but it doesn’t mean you’re going to get a response. We’re going to go through the other areas and eventually some of the ones that will mandate that they provide a response.

The second thing is related to getting your access to your tax returns. One of the very common things I hear actually usually multiple times a week is that your spouse or that a spouse basically forged a signature on a tax return, and you’re unsure if the information in the tax return is correct, if you have some additional liability you might not know about, if the taxes are reported correctly. You never signed them yourself. You don’t really know what’s in there, and you’re worried about the contents of the tax report. The other thing that’s relevant about a tax report is that assuming that everything is in order on those tax forms that you file, tax reports are one of the most useful areas to get a sense of what assets that you have. Here’s what I mean. If there is a bank account somewhere that you might not know about, let’s just say at Bank of America because it’s the largest bank, I think, in the US, and if there’s a bank account that you don’t know about and it earns a dollar in interest over the course of a year, guess what? That bank account and that dollar of interest should show up on the tax forms. If it does not, there are some bigger issues. Oftentimes you will find a lot of assets you don’t know about if you’re used to knowing what you’re looking for on a tax return.

Here’s the challenge, of course. We’re talking about getting access to information. The challenge is that how do you get your tax reports if you don’t sign them, if you don’t have a copy of them, your signature was forged, you don’t have them handy laying around, and your spouse isn’t being forthcoming about them? Actually, it’s pretty easy. If you go to the IRS website, they have something called Get a Tax Transcript. If you type in get your tax transcript or transcript from the IRS on Google search or online, the IRS website will pop up, and they have a form you can provide to get a copy of your transcript and your taxes. You can get, I think, three to five years worth of your tax returns. They will provide either an electronic copy or a physical copy in the mail of those tax returns. Of course, you have to fill out some information to get those tax returns, but the point is if your name was signed on a joint tax return, it’s a record that you can get from the IRS as a government service. It’s free, and you can get copies of your tax returns by requesting that transcript.

The other thing that you can do is IRS offices are everywhere across the country. I’ve had many people do this. You can go to your IRS office, identify yourself, and request copies of the tax transcript. They will provide those for you if you go into the office and ask them in person. This is one of the most important ways. I think I say it on every call where someone asks, “Well, where do I get this information? I think I don’t have a full picture of our accounts.” I always say, any forensic accountant, any lawyer will ask this question as well, is start with the tax returns. From there you will be able to have a lot of clues that show up in a myriad of ways on the tax returns.

I could talk about this point for a while. Even with my personal taxes, I filed my taxes. Because I’ve traveled quite a bit and I have a few different addresses, I missed a document. I didn’t send it to my accountant, and I filed my taxes, and the IRS rejected them. I was like, “Oh, well what’s going on?” They said, “Well, you’re missing this form.” What happened is I had to add in this form. I went and dug it out, and I added in this form. Then I resubmit my tax. The point being is all of these items that you might be looking for, these accounts, these interest retirement accounts, contributions, other investments, whatever, will show up or should show up on your tax form somewhere, particularly if you’re looking for outside assets or outside investments that you don’t know about. If they don’t show up on your tax form, then it might not be there or your spouse is substantially cheating on their taxes, in which you have a lot of other considerations to think about. But let’s move on.

You can get copies of your tax transcript. That’s important. The third thing on my list is use your memory. If you have any inclination of accounts you may have had, be it investments, be it real estate, be it a bank account statement, be it something you remember coming in the mail, it could’ve been a credit card, it could’ve been anything, any account firm that you’ve seen, or have a clue about, or have thought of, try and jot down as much information about those things as you can because ultimately you might actually find a way to get access to that information and use those clues or breadcrumbs just from memory. Oftentimes you know more than you think you will. Then you’re going to be able to use that information to help your attorney, me, your accountant to know where to look, and know who to ask, and where to start digging. Anything you can dig up by memory, or if you remember an email, or an account, or whatever, make a list of those and collect just as much information about them as you can because they’re going to be useful for the next point, which is point number four.

This is the big one. This is the subpoena. I’m sure if you’ve ever watched a television show that talks about legal stuff, you’ve heard the term subpoena. Subpoena is a very important word and legal time. Basically it is a legal document that says that the person receiving it or company receiving it needs to act in a specific way or provide specific information. I’ll give you an example of what this is. Let’s return to Bank of America. Let’s just say, “Hey, I remember some sort of account from Bank of America that we had for a few years. I don’t have the account number of information on it, and my spouse isn’t providing the information willingly.” You can say or your attorney can say, “All right, well we’re going to issue a subpoena to Bank of America to provide all of the records related to an account with this person’s name on it.” Bank of America will be legally obligated to provide that information to you. It’s not always mandatory, but it’s 99% of the time mandatory. You can fight a subpoena, but that only happens in very rare circumstances.

I have a case now where there is a real estate under question. One of the ways we got some information from them is we had to subpoena the building management company and everyone who was connected to this real estate. They were legally required to provide certain records about who owns it, what percentages, what financial information there was about this building. They provided that information, and now we have it and can make much better decisions during the divorce process. If you don’t reply or your spouse doesn’t reply to the subpoena, subpoenas come with a wide variety of potential punishments as part of the case. It can include fines, jail time, and many other things depending upon your state and what’s going on. Subpoenas are a great way to force or require access to information.

The reason I put subpoena fourth on this list, and this list is in a particular order for a reason, is if you’ve asked about some accounts and maybe you get some information, you look at your tax returns and you get a little bit more information, you use your memory and you get some more information, with all of those clues if you’re starting to put together this puzzle, it’s a big puzzle and you’re starting to put it together piece by piece, ultimately a subpoena is that tool that attorneys can use to force you to get a much larger section or pieces of that puzzle, particularly when you know where to look. If you don’t know where to look, your attorney can’t subpoena, I guess he or she in theory could, Every bank in town or every financial institution in the country, we’re talking about tens of thousands, if not hundreds of thousands of different places.

What you need to do is be able to say, “Hey, I have this breadcrumb that I saw on my tax return on page eight. I have this breadcrumb from my memory that we had an account here at one point. I have this breadcrumb from whatever else that I think we need to follow up on, and there’s more to the story here.” Let’s take that information and leverage a subpoena to see if we can get some more information out of it and get a more complete picture of those things.

Then the last thing on the list after subpoena is a forensic accountant. I have episodes on the podcast with forensic accountants. I have a large series in the store in the Quick Start Guide, as it’s called, with information about finding hidden assets and how to use a forensic accountant. A forensic accountant is one who is an accountant whose expertise is taking all of these breadcrumbs and putting together a coherent financial picture. A forensic accountant can look at page 17, or I’ll use an example. I have some clients with tax returns that are 180 pages because there’s lots of supporting documentation. They have complicated financial pictures. A forensic accountant can take a 180-page tax return and look on page 79, line 16 and say, “Hey, there is something to this account. We need to do a lot more digging. Let’s track down more information about it. Here’s what I know from this account, and it’s probably a big one.”

A forensic accountant is specialized in doing those types of analysis and basically taking all of these breadcrumbs and putting together a clear and coherent picture to the best of their ability to help you track down all of these assets that may be missing, hidden, or some other way financially questionable in terms of things that are going on. It’s a very specific niche of accounting that requires a good deal of expertise. It’s not cheap, so one of the things I always say before hiring a forensic accountant is, “How much money do you think is realistically missing?” because I’ve seen forensic accountant bills go up into the tens of thousands of dollars easily, particularly when there’s a lot of complication and it’s hard to get things. If you have hundreds of thousands of dollars or millions of dollars at stake, then oftentimes it is well worth the investment. Think of all these things as an investment. If you have to invest some money to get a lot more money, then it can be worth it. A forensic accountant will ask for all of these tax returns, all of the things that you remember from memory, things from a subpoena. They might help your attorney craft an appropriate one. All of these things a forensic accountant, a good one, will ultimately put together a comprehensive picture for you when it comes to finding that money or assets that are missing.

The thing about this process, and I want to step back for a little bit, if assets are hidden, it’s not a guarantee that you’re going to find them. Even if you do find them, it’s not a guarantee that you are entitled to those assets. It can be a complicated process, and there can be a lot more to it. But you do need to oftentimes know that these assets exist. The good thing I will say in the modern world, unless your spouse was a drug dealer or had a cash business, you can find a trace of assets everywhere from an email, from a wire transfer, from a public document, from whatever. There is a transaction record of everything. The question is how much it’s going to cost you to get access to it, and is it really worth it for you. If your spouse is being forthcoming, and you think they’re being forthcoming, and everything seems to make sense, you won’t have to go down this path of getting a forensic accountant, and issuing subpoenas, and everything else. This process takes a very long time to put together, sometimes years, when it comes to all of these things. You have to really wonder and think about what the right decision is for you.

But if your spouse is not being forthcoming and there are a lot of things, and questions, and concerns that you have, I know because I talk to you every day on coaching calls, you ask me these things. Sometimes I’ll talk to you and say, “Hey, that sounds a little suspicious. I think there’s more to it. Let’s dig in further.” I say this as well. I try and be as honest and frank with you as I can. I’ll say, “Look, from what you’re telling me, I understand that some stuff is missing or this sounds a little bit questionable, but I don’t know if it’s worth it emotionally, financially, time-wise and everything else to drag on this process given what else you’ve told me to date. Maybe it’s not the best idea to pursue this path.” Whatever the case is, you have to think about what’s right for you. I just want to give you the tools and the information so that you can think about these things and ultimately make the appropriate decision.

Just to summarize quickly again how to get access to information, I talked about five things. The first is you ask. Second is get copies of your tax return, and specifically your tax transcript. The third is use your memory. You probably know a lot more than you give yourself credit for. Fourth is a subpoena, which is issued by an attorney. You can ask your attorney about that and if it’s appropriate for you. Then finally is employing the services of a forensic accountant. For many people, that may be an essential item. I’ve seen some great work from a forensic accountant that’s just unbelievable, particularly where there is a lot of money and financial complications. Forensic accountants can be the essential part of this divorce process.

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