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Show Me the Money: Helping Clients Find and Protect Assets in a Divorce
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Show Me the Money: Helping Clients Find and Protect Assets in a Divorce

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ABA Journal Podcast

Show Me the Money: Helping Clients Find and Protect Assets in a Divorce

Feb 6, 2012, 02:59 pm CST

A client can try to preserve his or her assets during a divorce, but if the judge sees actions more along the lines of hiding money, the court will likely take more. Matrimonial lawyers Ira Friedman and Randall M. Kessler discuss this and other battle stories with ABA Journal Podcast moderator Stephanie Francis Ward.


Listen now: Show Me the Money: Helping Clients Find and Protect Assets in a Divorce

In This Podcast:

Ira Friedman

Ira Friedman practices family law with Beverly Hills' Friedman & Friedman. He’s a past chair of the Beverly Hills and Los Angeles County Bar Associations' family law sections.

Randall M. Kessler

Randall M. Kessler is a partner with Atlanta's Kessler & Solomiany. He chairs the American Bar Association's Family Law Section.

Podcast Transcript:

This ABA Journal podcast is brought to you by WestlawNext, the most advanced technology combined with market-leading content and West’s history of trusted editorial excellence. Helping legal professionals save time is what they’ve been doing for over 125 years. Learn more at WestlawNext.com.

Stephanie Francis Ward: People often don’t want to part with their money, especially when they’re divorcing. I’m Stephanie Francis Ward, and today we’re discussing family law assets recovery with Randall M. Kessler, an Atlanta, Georgia lawyer; and Ira Freedman, who practices in Beverly Hills.

Randy and Ira, welcome!

Ira Friedman: Hi, thanks for having us.

Stephanie Francis Ward: Let’s start this out–I have a question for both of you. And Ira, perhaps you want to take this first. Are there some ethical ways to shield assets in a divorce and if so, can you give me some examples?

Ira Friedman: Well, unfortunately, it’s a slippery slope between shielding assets and fraud. And in California, you are required when you first file for dissolution of marriage–which is the California equivalent of divorce–you have to disclose all of your assets. And if you don’t disclose them, the other person can not only get half of the assets when it’s uncovered, they can get all of it, at the discretion of the court.

The best example in California was a woman–it’s not my case–a woman had a winning lottery ticket. She didn’t disclose it and then when it came for the hearing, the judge awarded the husband all of it, not half. So it’s a very difficult situation to do and I don’t usually get–I won’t get involved in that. You know, let them go somewhere else.

Stephanie Francis Ward: Well, I’m curious, and you must have seen this in your practice sometime: How do you handle a client who maybe wants to do some asset shielding that’s not right? How do you say, “Look, you’re being an idiot?” I mean what do you do?

Randall M. Kessler: Do you want me to take that one, Ira?

Ira Friedman: Sure, go ahead.

Randall M. Kessler: Well, you know what we do is, we do a lot of social engineering–you know, just by our nature. People come to us when they’re hurt, when they are having a hard time and they want to screw the other one over. They want to take advantage and they want to win at all costs. And you know, it’s easy for us because we can sit back and say, “Down the road, you won’t feel that way. Your anger will subside and you’ll regret your behavior” or “This isn’t what’s in the best interest of your children, so maybe you should rethink your course of conduct.”

And I think it’s in that genre of issues that we face all the time as divorce lawyers. When we get the call from someone who says to me or to my staff, “I’d like to hire you because I want to be able to shield my assets in a divorce.” You know, alarm bells go off for us. It’s sort of, like you know, “Danger, Will Robinson!” You know somebody here wants to do something unethical.

And the question isn’t really, you know, do we tell them not to do it. The question is, how do we tell them not to do it? And how do we socially engineer or how do we correct or redirect behavior? And I think it goes to, how do you want to be perceived? How do you want your life to look three years down the road?

The shortcut is to say, you’d rather be honest and be accused of doing something then to be caught lying about it, you know. An easy example is adultery, when people say, “I’m going to lie on the witness stand about adultery.” And we say, “You can’t lie, number one; but secondly, if you do lie and you get caught, then you are twice as much in trouble.”

So trying to shield assets is really–there’s no good way to do it. It rarely works, but more importantly, even if it does work, the risk of getting caught almost always outweighs the benefits of shielding the assets.

You know, if you get caught hiding a million dollars, the judge is going to think that you had $10 million somewhere else, because how will you be able to prove that that was the only lie you committed? That that was the only million dollars that you hid, once they find it?

So is there an ethical way to shield assets? Maybe. You know, I think the term is more appropriately called “asset protection,” and that is probably more appropriate for a financial planner or somebody like that.

And to sort of carry on in that note, I don’t think of it as shielding assets, I think of it as: How do I make sure my client gets more of it or the other side doesn’t get as much of it as they want?

Stephanie Francis Ward: And for that second part of what you said, how does one do that?

Randall M. Kessler: Well, there are a couple of ways–and Ira, you can jump on top of me and cut me off whenever you want–but what I was about to say is that, you think of where would people want their money to be? And the easy answer–the really, really easy thing that we have in divorce is kids.

If you’ve got a million-dollar estate and you’re afraid that your wife or your husband is going to get $500,000 of that, then go to a financial planner and put $200,000 away for the kids. Your spouse will probably agree to that. Lock it up. Then you’re each only arguing about the remaining $800,000 and you have protected and shielded $200,000 that nobody’s going to be upset with you for doing. That’s sort of the easy way.

There are a lot of other ways that financial planners and people that are experts in estate planning can help you with, with irrevocable trusts and family limited partnerships. There are a lot of vehicles that let you protect assets. But of course if you are protecting it for yourself, the court can always allot money to the other side as alimony or make you pay money to offset the money that you’ve frozen. So there’s really–it’s hard to shield assets because, when you freeze your own assets, the court can make it up in other ways.

And I will defer to my colleague on the West Coast if he’s got–

Ira Friedman: Well, a couple of points I want to bring up. One, I think I’ve mentioned about the lottery ticket case. And the back-story was, the husband’s attorney said, “Just give us half and we’ll be happy.” And the wife’s attorney said, “No, I won’t do that.” And as a result, the wife ended up losing all of the lottery winnings, in this case.

But here’s the interesting thing about transferring property into somebody else’s name. This is not my case, but in a very successful business, there was a cosmetics business and there was also some real estate that the business operated out of.

So the father thought he’d get very clever. He transfers the real estate to his adult children. And then, further down the line, he said, “Okay kids, you can transfer it back to me now.” And they said, “Nah, I don’t think so.” So he sort of screwed himself in that deal.

And that can happen, you know, when you transfer property to a third party and then at the end of the day they say, “I’m not interested in transferring it back.” So now, what he was trying to do to evade the wife, saying, “Well, I don’t really own this real estate anymore, my children own it.” Then they didn’t want to give it back and there is nothing he could do. He transferred it to them.

Randall M. Kessler: It’s hard to shield assets. And you know, another argument that we have with our own clients is, you know, we tell them, “There are reasons that cliches develop and are popular and a very popular one is, ‘Pigs sleep in the gutter.’”

And when you try to take all of the money out of the pot and give it to your kids, like Ira just said–or give it to a family member or shield it in some sort of trust–courts, spouses, lawyers, financial investigators find a way to make it up. And sometimes in ways that are more painful, then had the original pot just been split right down the middle.

Stephanie Francis Ward: Now, alternatively, what are some ways to uncover assets that someone tries to hide, that many lawyers might miss?

Randall M. Kessler: Well, there are a lot of ways that you can uncover assets. I mean, I know lawyers are going to be listening to this and “discovery, discovery, discovery.”

But it’s not as much discovery, it’s targeted discovery. And most importantly, quick discovery. You know, we all have the right to subpoena bank records. And a lot of lawyers will wait until the husband or the wife fails to provide tax returns and bank account records and credit cards.

The simplest thing to do is to immediately subpoena the records, before the spouse can close accounts or interfere with it. And then do the discovery to the spouse, so that you see what they don’t produce and why they don’t produce it. And you’ve already caught them when they miss the April bank statement, which is the one where they transferred the $250,000 out.

It’s an easy answer. It’s an obvious answer, but it’s an important answer, which is: targeted discovery. And the most important investigator, the most important spy that exists in any case, is the client.

Clients know so much more about their spouse than we will ever know. They know more about their spouse than the banker will know. They know their tendencies. And just talk with your client and ask them, “What does he do? Who does he trust? Who did he talk to about his money?” Take an immediate deposition of his best friend or the person that he relies on for financial advice, casual or otherwise. The person he golfs with. I think it’s not as much what you do, but when you do it.

And so many lawyers wait until the process unfolds. And they do the standard, typical, boilerplate discovery and then three months into the case, after they finished the other trials that they’ve had waiting for years to try, they start focusing on this case. And the defensive party, the rich party, the moneyed party has already manipulated and covered and moved and transferred.

So I think more importantly then how you do it is, do it from the start. You are going to have to do it anyway. Why not do it right at the get-go?

Ira Friedman: Well, I was going to mention that, unless somebody is in either the garment business or the diamond business, which are notorious for–you know, operating on cash. And in the diamond business where there’s almost no written records, intentionally so. Most every business, there’s going to be a paper trail. It may take a little effort to go from Point A to B to C to get the records, but eventually, it’s going to come out.

If, as an example, if somebody has taken money from a business and put it offshore, there’s going to be a paper trail, at least to the money going offshore. Whatever happened after that, it may not matter, because the court may say, “Look, you took ‘x’ dollars, we don’t care what you did with it, you are going to be charged for half of it in California, or if it’s concealed, the other half.”

So I think Randy’s right, most of the information you need probably a.) is staring you right in your face and b.) if it’s not, then the client can fill in the gaps from the records.

I have found that private investigators by and large are useless, because most information between your client and noodling around on the internet is readily available. And, you know, once you start following the paper trail, you’ll probably come on the things as far as what happened.

And if it involves real estate, just by definition, everything has to be in writing anyway, so you’re going to find out what happened with that information. And in California, where there are title companies, you can get–if you have a good relationship, you can get all kinds of information from the title company as far as the chain of title, as far as what happened to property, as opposed to having the schlep down to the County Recorder and going through the index.

The title companies have a better database then the County Recorder. So that’s one of the things that I think is worthwhile. Plus, there’s a number of services that you can subscribe to that are not really expensive that’ll give you information, you know, regarding real property that’s owned around the state and so on, you know, as far as the big-ticket items.

Stephanie Francis Ward: What are some of those services? What are their names?

Ira Friedman: Well, you know, Lexis and Westlaw have those–

Stephanie Francis Ward: The personal property?

Ira Friedman: Right, they have that, and you know, I’m not endorsing either one, but there’s also some other services, you know, smaller services, and I don’t even know the names of them here.

We end up getting most of our information about real property from the title company, because literally at the touch of a button they can get almost any piece of information you want, depending on your relationship with them.

So we very rarely even have to pay for much of that. But there’s some other services in California that have that kind of information. And there’s certain other information you can get if you sign up in California for Department of Motor Vehicle information.

But, by and large, unless someone’s a car collector, I don’t know what, you know, what value as far as that’s going to give you other than that you find out that they own a couple cars, unless they’re a classic-car collector.

So that is usually the best way to get information. The tax return is going to be at least a starting point, because if they own something–you know, an interest in a partnership or something–that’ll point your nose in the right direction as far as subpoenaing records from the LLC or the limited partnership or banks if there was any interest paid.

And also, you will probably want to subpoena financial statements, because you know when people are applying for loans, they put down all kinds of great stuff and –

Randall M. Kessler: Everyone’s rich when they need money, right?

Ira Friedman: Oh yeah, yeah. And as some judges have said when they see how much somebody makes–you know, digressing as to support and now they say they are making very little. Some judges have said, “When were you lying, then or now?” Because –

Randall M. Kessler: That’s exactly right.

Ira Friedman: They’ll puff on their financial statement, but also it will show a road map of various assets, which will give you another area to subpoena records from.

Stephanie Francis Ward: I’m curious; you talked about getting a lot of this information from your client. Is it hard sometimes with certain clients to get the information out of them that you need? And if so, how do you get that? Randy, do you want to take that first?

Randall M. Kessler: Sure, well, I mean, some clients are naive. They’re just naïve, not financially astute, they don’t want to be, they shouldn’t have to be, and they need assistance.

You know, we had a case where we represented the controller of a multinational company. He was the financial controller, so he certainly knew his assets and the money, but the wife not only didn’t know the assets, she didn’t speak English, she was foreign. And so, what we recommended–and I did this on behalf of my client, the husband–we recommended that the other side hire a forensic accountant that my client paid for.

We knew it would not be a fair fight and there would be no settlement, as long as she felt like she was in the dark, so we hired a forensic accountant and showed the forensic accountant all of the documents so the expert could say, “Let me show you that what he says is right.” Or if she found some holes, she would have poked holes.

So it’s okay to get your own client a financial expert to explain things to your own client, as well as to dig for the other side’s information. You know, there’s–what we really do, is we hire accountants to look for smoke and people might say, “Well, you can see smoke, can’t you?”

And the answer is, I can see smoke, but based on the color of the smoke I can’t tell if it’s an acid fire or a gas fire or a paper fire or a coal fire, but that’s what forensic accountants and forensic experts on financial matters do. They can look at the smoke and they can tell there’s something missing here, there is something not right.

And in any case where there’re significant assets–and by that I mean, probably a million dollars or more, or maybe a little bit less than a million dollars–it’s worth $5,000 to $10,000 to at least let them look–let the experts look for smoke.

Now if they don’t see any smoke, great, then you don’t spend any more money, but if they see smoke, then you might pay them a little bit more because you want to find out where the smoke is coming from, if it looks awkward or funny or weird to the experts.

But having a relationship with a good financial expert or two or five, who’s qualified and trained is invaluable for any divorce lawyer. I think–I learned how to be a lawyer, I learned how to research the law, I learned a little bit about counseling clients. I am learning everyday how to practice law. I am not a forensic expert. That’s not what I do. I am not trained as a CPA, and I know my limitations. I know enough to say, “This is over my head and I will be outsmarted, outwitted and out-lawyered if I don’t have some expertise on my side.”

So when the assets are there, you know, it’s sometimes hard to tell a client whose paid you $20,000 to pay somebody else $5,000 or $10,000. They think we can do it all, we should be able to do everything. But that’s, I think, invaluable to make sure the client knows that there’s an expert looking at those numbers and that will save them lawyer’s fees. Because for me, at $400 or $500 an hour, to look at a financial affidavit or tax return, it will take me twice as long to find something in it, that an expert who charges $300, $400 or $500 an hour could probably find in ten minutes. So –

Ira Friedman: I tend to rely on–after I’ve gone through some things, forensic accountants. And in California, I mean there’s probably a half dozen of what I like to call “the usual suspects” in the field. And, when you feel comfortable with one or two or three of them–depending on if the other side hires them first–it’s interesting how they can uncover all kinds of information that either you missed or you’re not sophisticated enough to come up with. And also, the same processes with them is with your own client is where they may find Item A, B and C which will lead you to the rest of the information. So they are very valuable, beside their core function of deciding how much is available for support, and what the assets truly are.

And they are good at sniffing out things. Can they always sniff out everything? No, not always. I don’t know if you want at this point to give you some examples of some of the things they’ve–ways they’ve come up with things.

Stephanie Francis Ward: Sure.

Ira Friedman: Okay, I’ll give you an example that was–it was not my case, but this one accountant was doing an appraisal of the value of a beauty salon, which you know has a lot of cash.

And a lot of it obviously didn’t go through the books. So one of the things they determined was how many towels were used per customer by actually observing and then they were able to extract the number of towels and what the average bill was and that’s how they came up with how much the business was grossing.

That’s one example. There’s other examples, and I’m trying to think of some other ones that they’ve come up with, creative ways of determining how much money a business takes in.

Sometimes –

Randall M. Kessler: Well, there is circumstantial evidence, Ira, just like in the simplest case where you don’t have a picture of a duck, but you have duck droppings and duck, you know –

[Crosstalk]

Ira Friedman: Sure.

Randall M. Kessler: Circumstantial evidence can work the same way in financial investigations.

Ira Friedman: I’ll give you another example, either–and it works for some lawyers who are criminal lawyers and it also works for–sometimes a psychiatrist. And I’ll tell you how it works in both examples because they are sort of the same.

Criminal lawyers, by definition, have very little paperwork and they usually just get a flat fee for each portion of the case, you know, sort of a fee for the arrangement, a fee for the prelim and a fee for the trial.

And as a friend of mine who is a criminal lawyer said when I said, “Will you send out a bill?” And he said, “What’s a bill?” Because he doesn’t have any bills, it’s just cash and carry. But one of the–

Stephanie Francis Ward: Get your money upfront.

Ira Friedman: Right. And you know, some criminal lawyers get their money in cash. So you figure, how do you back into that? Well, get a copy of their appointment book. And even if they want to block out the names, if it shows that they were meeting with a client or which I don’t think you can block out, if it says that they had to be in a certain department at a certain time. What–unless they were doing all of this work for free, you are going to be able to back in, you know, “How much did you get for appearing in this department on such and such a date?” And so on.

And the same thing is true with psychiatrists, some psychiatrists, by definition, keep no notes. And the reason is, if their records are subpoenaed it will be a blank sheet of paper with an address–a billing address, and that’s it.

And you say, “Why do they do that?” Well, it’s to protect the patient, but more so, one of the things some psychiatrists do, which has nothing to do with this part of it, is they keep in their appointment book the medications that they’ve prescribed at where they’ve penciled in the appointment. But again, that appointment book is going to show how many people they had coming in a day. So that’s sort of a way to back into the income.

Does it work all of the time? No, it doesn’t work all the time. But a lot of times if the other side feels that you’re onto them, they may decide to have a confession to what’s really going on. Because, you know, as Randy said earlier, if the judge thinks that you are only hiding–you say you were only hiding a million, the judge may think, well if he only admitted to a million, maybe there’s $10 million that he is hiding. And on the credibility scale, you start to go down very rapidly with a judge.

Randall M. Kessler: There are some experts–I gave a presentation to a group called International Association for Asset Recovery and that’s all they do. They’re lawyers, they collect big dollar amounts when there’re big judgments.

And one of my co-presenters said the way you deal with people that hide assets is, you have to think of them like rats, because they think, “I’ve stolen this money fair and square, and I’m not giving it up.”

So you know, we have this sense of fair play, as lawyers, is full disclosure, etc. But if you are dealing with someone who is not going to disclose, you’ve got to think of everything you can do to make them disclose it.

And like Ira said, if they think you’re onto them, when they are backed into a corner, they may try to find a way out by saying, “Yeah, I admit to this” or “I admit to that.”

They may think they are doing it because they’re good people. They are doing it because you caught them or you’re going to catch them, because you’ve just asked their best friend, their receptionist, whoever it is about where they were on certain dates and times and they know you are getting to a pot of gold. It’s better for them to look honest like they’ve disclosed it, even though the reason they are disclosing it is because they knew they’d be caught.

Stephanie Francis Ward: Let’s go back, I want to go back to what Ira said about the attorney’s appointment books or the psychiatrist’s appointment books.

Perhaps this is a stupid question, but I’m curious–is it hard to get the judge to give that to you, in terms of work product?

Randall M. Kessler: Well, there’s a–you can redact, look, I was sending out a request for, you know, a lot of attorney’s fees today and I’m redacting what’s confidential. What’s confidential? There are things that are confidential; there are things that are not. Where a lawyer is on a certain day is certainly not confidential. Who a lawyer is meeting with, may be confidential. But you can certainly–you can certainly ask, you can certainly make them think you are going to get it. And put the pressure on and you will probably get most of it.

Ira Friedman: But, if it says that at 8:30, the lawyer was supposed to be in Department 100 for the People vs. Smith. I don’t think–that’s public record.

Stephanie Francis Ward: That is public record, yeah.

Ira Friedman: I don’t think he can protect that. Maybe in the afternoon, he has an appointment at 2:00. He can block out the name, but he’s got the fact that there’s an appointment.

And the other thing is, if it’s sufficient enough information that you’re trying to get, the court could appoint a Special Master to review the records. You wouldn’t get to see them, but the Special Master could review them and find out information.

Stephanie Francis Ward: I was also curious, when you’re dealing with clients and their assets, are there some times when they want to fight over something that they want to hang on to and you just have to tell them, “It’s just not worth it?” And how do you get that message across?

Randall M. Kessler: How do you tell them it’s not worth it?

Stephanie Francis Ward: Yeah.

Randall M. Kessler: Well, one thing is you tell them how much it’s going to cost to fight about it with very little chance of getting it.

But how do you tell them it’s not worth it? There are–you just tell them. What we try to tell people is, “Full disclosure is always better.” Not just because it’s the right thing to do, but it’s also better strategy and again, let’s use the adultery example because it’s much more vivid and easier to imagine this type of example.

But, if we’re calling for–if adultery is relevant in your state and you’re accusing the other side of adultery, sometimes you don’t want to bring the adulteress or the girlfriend or the boyfriend into court because you’d rather the judge–or in Georgia, sometimes the jury–imagine what the person is like and imaginations go wild.

So if someone’s hiding assets, and it smells like they’re hiding, but the other side just can’t prove it, well that imagination is going to spark a lot of wonder. And if you know you are trying to cover up things, and you’re covering up a few hundred-thousand dollars and the other side can show the judge that they are having a hard time finding information, they think it’s there they can’t really find it. It sounds fishy. If the judge gets wind that something fishy is going on and the judge’s imagination is going to run rampant.

So I mean, full disclosure is just better for so many reasons–aside from just that it’s moral and ethical and right.

The other thing is, depending on the size of the asset, if you’re trying to hang on to $50,000 and it’s costing you money to fight and file motions for protective orders, you know, you’re going to spend more in attorney’s fees and delay. And the other side is never going to settle if they don’t feel like they have had full disclosure, at least not until they have fought and done as much as they can. There’s just so many reasons that make sense when we try to persuade our clients that it’s not worth fighting to hold onto it or to hide it given the risks that if it’s found or even if it’s not found, if you look like you are trying to hide, you’re going to come off ten times worse.

Ira Friedman: Let me turn the question on its head. Let’s suppose that–and then you’ll see where I am going with this. You know, first of all, family law is fueled by emotion rather than logic in a lot of cases. Let’s assume that an asset is disclosed, it’s not a case where it’s an undisclosed asset.

One of the spouses says, “I want to keep the house.” And you try to tell them, “Look, you make $1 a month and the house costs $2 a month to maintain. You can’t afford it.”

Same discussion, sometimes they will argue with you for hours on end, “But I want to keep the house!” And you try to explain, logically, you know, “You can’t afford this.” “But I’ve lived there all this time, the kids grew up there, you know, I want to die in the house” and so on. And so, even on that basis, it’s a problem because of the emotional component of dissolutions that people get fixated on certain things and it isn’t always the high-ticket items, sometimes. Sometimes it’s the smaller items, but it’s the same problem you face, and probably it’s magnified more if it’s an undisclosed asset.

But, Randy’s right, you have to tell them, “It’s going to cost you $2 to keep a $1.” And sometimes they don’t even care.

Stephanie Francis Ward: Ira, what’s one of the most unusual ways you have found someone’s assets that they were trying to hide from your client?

Ira Friedman: Actually, not–I don’t really end up having unusual things. I’ve always found the best information is staring you in the face. So, I’ve never really had situations where that’s happened.

Randall M. Kessler: Come on Ira–we all talk behind–come on, I know this is a podcast and we want to make sure it’s full disclosure, so Ira’s always telling me the stories where he goes trash diving and puts on a scuba uniform and –

Ira Friedman: I wish–I wish.

Randall M. Kessler: He’s found some great–some great stuff in those big trash bins out in Beverly Hills.

Ira Friedman: No, but I’ll tell you–I will tell you a story about that a private investigator that–I’ve never used him per se, but I’m friendly with him. He’s a funny guy to talk to.

In Beverly Hills, you are not allowed to go into a dumpster. It’s illegal. So that having been said, the interesting thing about it is, he told me, he says, “You know sometimes when our people are going down the alleys and we knock over a dumpster, we feel obligated to put the stuff back.”

After, of course, they’ve taken everything out of it. But I just always thought that was interesting. You know the problem with that is, that’s another thing that you have to consider. Let’s assume, you do this dumpster diving. First of all, a lot of people are getting more savvy. They shred things with a crosscut shredder because if you use the other kind of shredder, they can put it back together.

So that’s one problem. The other problem is that whether it’s cost effective, because in a lot of cases, are you going to spend $100 to find something like this? I can tell you a different type of example where one of our colleagues hired one of these computer experts to reconstruct something. Spent a fortune and they ended up coming up empty.

That’s the other thing. Sometimes, one spouse says, “I know my spouse is hiding assets.” And the accountants go through and spend a ton of money and they said, “It’s always possible that we can’t find anything.”

So again, you’ve got to do a cost analysis to see if it’s worthwhile.

Stephanie Francis Ward: Randy, how about you? Do you have any unusual stories to share with us about how you’ve uncovered assets?

Randall M. Kessler: Well, the dumpster diving is what you hear about and you know –

Stephanie Francis Ward: You know so based on what you guys are saying, though, this dumpster diving, is that sort of thing even worth it? I mean it sounds like you’re much better off with your forensic accountant.

Randall M. Kessler: Look, you can talk about a needle in a haystack and Ira and I have been around long enough that we’ve heard amazing stories. I mean the best way to do is to do it the old-fashioned way. Hard work, discovery, searching, thinking it through, looking at people’s habits, but you know, we can’t say, don’t do it because as soon as you tell somebody that a private investigator won’t work, and I agree with Ira, they spend a lot of money and they rarely come up with gold.

But, you know, there are occasions, we had an occasion–and again we have jury trials in Georgia–adultery matters in Georgia and my client was the spouse–the victim’s spouse, and her husband–we were sure was cheating. They hadn’t had sex in three years, he had been working out, been coming home late. All of the signs that point to him having sex with somebody else, and we told her she didn’t need a private investigator, the jury was going to be sure that he was cheating and she hired one anyways.

Well, the night before trial, manna from heaven, we got a call that her private investigator who she had paid despite us telling her that it probably wasn’t worth it, called and this is what happened the night before trial.

The private investigator was following the girlfriend and the private investigator was following her too closely and got into a wreck with her. And when she got out of her car to talk about the wreck, the girlfriend was on the cell phone and said to the private investigator, not knowing that it was a private investigator, “I’ll be with you in just a minute, I’m on the phone with my fiancée.” You know. Bingo, we had the phone records, we had the phone number, and that was it.

She didn’t know that she was talking to a private investigator, talking about being engaged to my client’s husband. You know, so sometimes you do get lucky.

So when you ask, “Has it ever happened?” Certainly, things like that happen. You know, you get lucky–like I’ve got three or four stories like that. I’m sure Ira has a few. But we only have three or four stories like that, because we see thousands of clients over the course of our career and they’re so memorable because they are so rare an occasion, that you get something where somebody really does find the certificate of deposit that they thought had been discarded.

You know, it happens, it does happen. And the only way to be sure is sometimes to spend the money, but I can’t in good faith tell my client, to spend $10,000 or $20,000 on a private investigator unless I really think that there’s a chance or I think there’s no other chance to find it.

Stephanie Francis Ward: So, it sounds like, don’t spend the money on the P.I.s, spend it on the accountant unless your client insists?

Randall M. Kessler: Or targeted P.I.s, or take depositions, do the discovery and then when you know which account or which country’s bank accounts or which area of town you need to send a P.I. to, then maybe have it targeted. But not a blanket, “Private Investigator, please go follow my husband, and I hope you find out how much money he’s got.”

Ira Friedman: Most of the time the P.I. tells you stuff you already know and a lot of times, if I’ve hired somebody, I tell them, I don’t want to know these five things I already know. I don’t need them to tell me the obvious that they own the home at 12345 Main Street. I already know that.

And most of them, you know, they restate the obvious. You know, I don’t find very much use in that. I’m sure that P.I.s who hear this podcast are not going to be very happy, but–

Randall M. Kessler: Or private investigators that work with financial institutions maybe or– but just specialize–I mean saying somebody–it’s like saying, “Let’s go fishing.”

Well, if you want to catch a fish, do you just throw a little line in the middle of the Pacific Ocean? No, you figure out what kind of fish you want to catch, what time of year, or what time of day, what type of bait, where they are likely to be. And then you purchase the right kind of equipment and you go to that specific area and you fish. And it’s a much better chances that you’re going to catch the fish you want if you’ve not just said, here’s $5,000, can you find out how much money we’ve got?

Stephanie Francis Ward: All right. Well, gentlemen, I think that’s everything that I have for you today. Did either of you want to add anything else?

Randall M. Kessler: I think it’s been wonderful talking about this and thinking about what to say. I think again, the easiest is usually the most effective.

I think depositions where people can–you can see that they are wiggling and uncomfortable instead of writing a written interrogatory where you don’t know how creative they’re being.

But, I think it’s just common sense, don’t forget common sense. Think about how you would hide money from somebody and how you would be found out, and then, use that to your advantage.

Stephanie Francis Ward: Okay.

Ira Friedman: All I can say is, in California, if adultery was involved in dissolutions of marriage, it would back the courts up for five years.

Randall M. Kessler: Yeah, but it’s so much more fun, right?

Ira Friedman: I’m sure it is.

Randall M. Kessler: Come try a jury trial out here in Georgia sometime, Ira, you’ll have fun.

Stephanie Francis Ward: All right, well, thank you both for your time. I really appreciate it.

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