Discovered Marital Property After Divorce

by Beverly Bird

Finding out after your divorce that your spouse hid assets from you can result in a decidedly sinking feeling, especially if those assets are of significant value. But your ex should experience the distress, not you. You have options to claim your rightful share while your ex-spouse faces potential punitive damages. Depending on where you live, it doesn’t always matter that your divorce is behind you.

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Secondary Lawsuits

If your spouse neglected to mention certain assets when he was divulging them to you and the court as part of the divorce process, some states allow you to reopen your case. You can file a post-judgment motion with the family court that granted your divorce under the same docket or case number that appears on your decree. Because the rules vary a great deal from jurisdiction to jurisdiction, speak to an attorney in your area if you discover marital property after your divorce is final. A professional can tell you exactly what court rules apply in your state.

Defenses

If your spouse hid assets deliberately, you can expect that he won’t surrender your rightful share of them without a fight. A common defense is claim preclusion, also called collateral estoppel. This legal doctrine essentially states that you had your chance to litigate property division during the divorce proceedings and if you didn’t make full and good use of that opportunity, that’s your problem not your spouse’s. The Arizona Supreme Court rejected this argument in the 2006 case of Dressler v. Morrison, but if your spouse raises such a defense to your litigation, arguing against it will probably require an extensive understanding of the law. It might not be something you’d want to undertake without the assistance of an attorney.

Punitive Damages

If your second lawsuit is successful, the outcome will depend on whether the court believes your spouse omitted the assets intentionally or in error. If the omission was an oversight, the court might divide the value of the discovered property between you in the same way and in the same proportions it divided your other property in your divorce. However, if you can prove malicious intent or fraud, it’s conceivable the court could punish your ex for his actions. The court may award you the entire value of the asset or your ex may be required to pay you compensatory damages because you didn’t have use of the asset for a period of time. You might even receive punitive damages, an amount of money or property payable to you because he committed a wrongdoing.

Equitable Distribution Vs. Community Property States

Generally, you stand a better chance of recovering your share of hidden assets post-divorce if you live in a community property state. These states view all property acquired during the marriage as owned equally by both spouses. Therefore, your ownership interest in the asset that existed at the time of your divorce does not go away simply because your divorce litigation has ended. In some equitable distribution states, the courts do not have the power to go back and reopen issues of property division after the divorce is final, but that does not always mean that you don’t have the right to sue your ex in civil court for committing fraud. If you consult with an attorney, he can tell you what your options are. Some equitable distribution states do include specific provisions in their legislation for this type of post-divorce event. For example, Oregon obligates family courts to reopen a divorce case if the wronged spouse can prove the omitted assets existed at the time of the divorce.