Overlooked Assets

Oops! I forgot about that $253,000 pension!

Dan Johnson, Certified Divorce Financial Analyst

November 2011

Overlooking vital, and often very LARGE, assets during a divorce is a significant “mistake” and not that uncommon in many divorce cases. Should ALL assets be disclosed and inventories exchanged between divorcing couples? Absolutely! However, “requesting” a full and complete inventory of assets and liabilities is one thing…. actually “disclosing” all of the asset and liabilities is quite another! I can’t tell you the numbers of cases where significant assets were initially overlooked, not disclosed and/or improperly valued. In most of these instances, the “uninformed” spouse would have likely lost tens, or hundreds, of thousands of dollars which they would otherwise be entitled to receive!

One case for example – A woman called me and asked if I would review her divorce decree before she signed it. Her attorney had completed the decree and wanted her to sign the decree and then submit it to the husband for signatures. Upon reviewing the case, I discovered that her spouse had previously worked for technology firm in Austin (22 years). I was also aware that most of those former employees had substantial pension plans, many of which were “cash value” plans. I strongly suggested that her attorney make another formal, and specific, request for pension disclosures related to that former employer. A week later, the client informed me that her husband had submitted and disclosed to her attorney that he indeed did have a $253,000 “cash value” pension which had been overlooked on his inventory of assets. Upon receiving this critical financial information, we modified the divorce decree. As a result, the wife received an additional $175,000 of retirement assets which she was able to roll into her new IRA account.

Too many people mistakenly assume that the attorneys will obviously obtain ALL the relative financial information. Again, most attorneys are there to advocate for clients and represent them in the legal matters surrounding a divorce. However, most attorneys do simply not have the time or expertise to also be financial analysts, tax advisors and forensic accountants! It is not necessarily intentional or malicious to overlook assets (or properly value assets), but it can and does happen often! This is exactly why a good “team” of experts includes a financial expert as well as the attorney.