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What is an offshore account?

If you and your high-asset California spouse will soon head to divorce court, you should consider the possibility that (s)he may have one or more offshore accounts of which you are unaware. An article in the Washington Post describes how vindictive or greedy spouses often use an offshore bank account as one means by which to hide assets from their spouse during a divorce.

As you likely already know, California is a community property state, meaning that all marital property accumulated by you and your spouse during your marriage belongs to the two of you equally and must be split up that way when you divorce. But if you do not know that your spouse has put money into an offshore account; i.e., one located in a non-U.S. country, your chances of getting the marital property to which you are entitled decrease substantially.

Electronic transfers

Gone are the days when an asset-hiding spouse had to physically go to another country in order to hide assets there. Today most spouses make such cash transfers electronically from the privacy of their own homes or offices. Usually their spouse remains unaware that these transfers ever took place. Instead, it appears at first blush that somehow these marital assets went missing without a trace.

Fortunately for you, if you suspect that your spouse may have one or more offshore accounts, finding it or them is easier than it was in the past. For one thing, the U.S. government has signed treaties with numerous nations whereby they must report back when an American places funds into one or more of their accounts. In addition, the U.S. also passed the Foreign Account Tax Compliance Act back in 2010. This Act allows the U.S. to freeze accounts of foreign entities that do not hand over information on their U.S. account holders.

Forensic accountant

Despite the fact that it is becoming ever more difficult for an asset-hiding spouse to hide assets overseas, finding these assets can still prove to be a daunting undertaking, especially if your spouse has far-flung business interests. You likely will have to add a forensic accountant to your legal team. (S)he will have the education, training and background to make it easier for him or her to find, track and analyze these types of assets. His or her services, however, will not come cheaply.

This is general educational information and not intended to provide legal advice.