Divorce & Taxes
Earlier this week, a client had been referred to my office seeking representation for an imminent divorce matter. As I asked a few preliminary questions, he stopped me. "I'm the sole proprietor of a hardware chain and I've done a tremendous job hiding assets," he said. "I know all about the financial statement and based on the numbers I can report, I've got my child custody figures down to the penny," he added.
Now he wanted a divorce and was interested in only one thing: finding out what I would do to ensure that his wife got as little as possible in the settlement.
Imagine his surprise when I pointed out that if he had hidden assets from his wife, that he had also likely done the same with Uncle Sam. He was going to have to file amended returns. Since the couple jointly owned the business, she would have to sign the amended returns and therefore would learn of the assets.
There was a dead silence. He suggested that he might be best-suited to stay married for a few more years until he cleared up his mistake in judgment.
This illustrates how assets often determine if a couple can divorce, despite their emotional problems. Doing your pre-divorce planning early in the process and calling us well in advance of your imminent split won't lessen your emotional suffering but it will help minimize your pocketbook pain - particularly if your lawyer is given decent notice of the upcoming split.
