What happens if, after the divorce is final, a party discovers that the other party failed to disclose certain assets in the divorce proceedings?

The recent case of In re Ford out of the Texarkana Court of Appeals is instructive in this situation. In Ford, the parties had been married for 31 years and separated for 3 years.  Two months after the divorce was final, the Wife filed a new lawsuit complaining that Husband failed to disclose certain retirement income received while the divorce was pending.  Wife sought division of the undisclosed income. Husband testified that the money was spent on community expenses during the divorce, including support of the Wife.  Wife failed to show the existence of the money at the time of divorce. The trial court denied Wife’s request because she failed to show that the income existed at the time of divorce.

A suit to divide undivided property after divorce is governed by Texas Family Code sections 9.201 and 9.203.  The only assets divisible upon divorce are those in existence at that time. Assets that have been disposed of at a time prior to the divorce are not divisible unless a spouse is found to have committed fraud is the disposition of the assets and the marital estate is "reconstituted" to fictionally include the disposed assets. Thus, it is critical to a suit to divide undivided assets post-divorce to prove that the assets were in existence at the time of divorce.

The Texarkana Court of Appeals in Ford found that the Wife made allegations about the receipt of money by Husband, but she failed to carry her proof forward to the final step in the analysis — where was the money at the time of the divorce? She could have shown the existence of the money by tracing it to an undisclosed account that existed at the time of divorce, for that matter, undisclosed cash in the mattress. Because Wife failed to show the required proof, the Texarkana Court of Appeals affirmed the trial court’s denial of Wife’s lawsuit.

Most of the time in divorce lawsuits the parties exchange sworn inventories which detail each party’s position under oath regarding the existence and value of the marital assets, including each person’s position as to the characterization of the asset as community property or separate property. The point of preparing these sworn inventories is to have proof of the assets being divided in the divorce.  This would also be a good starting point in looking at the viability of a case for undisclosed assets post-divorce.  Was the asset listed in the party’s inventory during the divorce?

The second place to look in evaluating a post-divorce claim for undivided assets would be in the divorce decree entered by the Judge.  Are there general division provisions contained in the decree? It is common to use general language for the award of money on hand, bank accounts, retirement accounts, and even bonuses not yet received, such that a party is awarded "the accounts in his or her name".  This type of general language can block a lawsuit for post-divorce division of assets.

A third consideration in looking at a post-divorce division of undisclosed assets is to look at the discovery that was completed during the divorce.  Was a request for production sent seeking copies of all documents pertaining to the assets? If one was sent, did the opposing party respond fully to the request? If not, did the party seeking discovery seek enforcement remedies from the divorce judge to compel the document production? If the party failed to exhaust all available discovery options, it could cause waiver of the post-divorce suit claiming undisclosed assets. If the assets could have been discovered through diligence but the party complaining about the failure of disclosure did not exercise such diligence, then the post-divorce suit is waived.

Overall, it is very difficult to maintain a suit for post-divorce division of undisclosed assets and the Ford case is one example illustrating the difficulties.

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Photo of Michelle O'Neil Michelle O'Neil

Michelle May O’Neil has 27 years’ experience representing small business owners, professionals, and individuals in litigation related to family law matters such as divorce, child custody, and complex property division. Described by one lawyer as “a lethal combination of sweet-and-salty”, Ms. O’Neil exudes…

Michelle May O’Neil has 27 years’ experience representing small business owners, professionals, and individuals in litigation related to family law matters such as divorce, child custody, and complex property division. Described by one lawyer as “a lethal combination of sweet-and-salty”, Ms. O’Neil exudes genuine compassion for her client’s difficulties, yet she can be relentless when in pursuit of a client’s goals. One judge said of Ms. O’Neil, “She cannot be out-gunned, out-briefed, or out-lawyered!”

Family Law Specialist

Ms. O’Neil became a board-certified family law specialist by the Texas Board of Legal Specialization in 1997 and has maintained her certification since that time. While representing clients in litigation before the trial court is an important part of her practice, Ms. O’Neil also handles appellate matters in the trial court, courts of appeals and Texas Supreme Court. Lawyers frequently consult with Ms. O’Neil on their litigation cases about specialized legal issues requiring particularized attention both at the trial court and appellate levels. This gives her a unique perspective and depth of perception that benefits both her litigation and appellate clients.

Top Lawyers in Texas and America

Ms. O’Neil has been named to the list of Texas SuperLawyers for many years, 2011-2018, a peer-voted honor given to only about 5% of the lawyers in the state of Texas. In 2014-2018, Ms. O’Neil received the special honor of being named by Texas SuperLawyers as one of the Top 50 Women Lawyers in Texas, Top 100 Lawyers in Texas, and Top 100 Lawyers in DFW. She was named one of the Best Lawyers in America for 2016 and received an “A-V” peer review rating by Martindale-Hubbell Legal Directories for the highest quality legal ability and ethical standards.

Author and Speaker

A noted author, Ms. O’Neil released her second book Basics of Texas Divorce Law in November 2010, with a second edition released in 2013, and a third edition expected in 2015.  Her first book, All About Texas Law and Kids, was published in September 2009 by Texas Lawyer Press. In 2012, Ms. O’Neil co-authored the booklets What You Need To Know About Common Law Marriage In Texas and Social Study Evaluations.  The State Bar of Texas and other providers of continuing education for attorneys frequently enlist Ms. O’Neil to provide instruction to attorneys on topics of her expertise in the family law arena.