WHY CONDUCT AN ASSETS SEARCH?

There are clearly situations of a business or personal nature in which it is essential to check for assets. Knowledge of such assets can make a big difference in the establishment of grounds for interpersonal actions or the furthering of certain business relationships.

Entering into a New Business Venture - If one is considering investing in a new business, bringing a new investor into an existing company or contemplating a merger between companies, it is essential to conduct a thorough background check on the individual or corporation. Such a check also includes a comprehensive assets search.

Before Entering into a Lawsuit - Conduct an assets search prior to filing suit against an individual or company to determine what assets are present in the event a judgment is ordered by the court. It is not worth the cost of legal fees to file a suit against a person or company that will be unable to pay a court ordered sum. Determine what assets or property could be attached once a judgment is issued.

Collecting on a Judgment - When the court order a sum of money to be paid as part of a civil action, a judgment is issued, this is simply a court order for the payment of funds. It is rare for the defendant to simply pay the amount ordered on the spot. The judicial system only orders payment. Collection is the responsibility of the plaintiff.

Divorce - The finances involved in a divorce can often become rather complicated. It is not uncommon for a spouse to hide assets that would be open to dispute. An asset search of the party being divorced is very important to be certain that all assets are accounted for.

Child Support/Alimony - Public child support enforcement agencies are ill- equipped to locate parents who evade their child support obligations. In child support cases, once the parent is located, information regarding their wages or any hidden assets should be given to the proper child support enforcement agency that can then facilitate collection.

Contestation of a Will - Quite often personal assets may be hidden and not disclosed in a will. Potential beneficiaries or those entitled to a claim against the estate should search for the possibility of hidden assets.

WHAT ARE ASSETS?

Everything that is owned is potentially an asset. Stocks, bonds, real estate, money in the bank, automobiles, RV's, boats, airplanes and even household furnishings are all considered assets. Personal assets are classified as either being personal property or real property.

Tangible Personal Property - Includes vehicles, equipment, inventory, telephone systems, computers, bank accounts, stocks, bonds and paid insurance policies with cash value. Any items of value that a person or a company buys or comes into possession of constitute a tangible asset.

Intangible Personal Property - This category includes patents, royalty agreements, promissory notes, contracts, accounts receivable, wages or other income.

Real Property - All homes, condominiums, apartment or commercial buildings and land are classed as real property. Only a residence that is protected by a homestead exemption is exempt from being attached. All other real estate is subject to claim through the courts.

HOW TO INITIATE AN ASSETS SEARCH

Initial Phase of Investigation - Before attempting to locate assets through public records, it is essential to have the subject's correct name and address. In some local record searches, the name alone will suffice without the need for an address.

It is vital to find out not only where the individual lives, but also their place of employment, if dealing with an individual.

LOCATING ASSETS

Creditors, investors and government entities have the greatest capability in locating assets, especially in cases where an individual or corporation owes monies that are not being repaid.

National Death Index - The Social Security Administration's Death Index should always be checked to see if, when and where a subject may have died.

Income/Wages - A major asset that can be attached or garnished is a person's wages. In collecting on a judgment, child support payments or divorce.

Defendant's Place of Employment - Professional skip-tracers often conduct surveillance on a subject by discretely following the person to his or her place of employment.

Unearned Income - An important source of revenue and includes money that comes from rental property, dividends or interest on stocks or bonds.

Subpoena of Business Records - If it becomes necessary to use the courts to obtain information, a Business Records Subpoena will reveal payroll checks that have been cashed.

HIDDEN ASSETS

People hide assets for a variety of reasons that range from personal to business in nature, but essentially they have property or money that they do not want discovered. Hiding of assets is not always a sign of criminal intent, but just as often it shows a moral or ethical failing in a subject's character: They feel the need to hide all or a portion of their wealth from scrutiny.

CHECKING PUBLIC RECORDS

Public records available in city halls, county courthouses, and at state repositories, contain valuable information that is essentially public information available to all who inquire.

Local Level Searches - Always start a search at the city or county level where most documents regarding real property, corporate data, UCC filings, divorce and community property proceedings as well as probate and motor vehicle information are to be found. Within these records are descriptions of real property; the make, model and license numbers of vehicles.

Search Jurisdictions - More than 4,300 jurisdictions in the United States store records that can be useful when seeking to locate assets. Most of these jurisdictions are at the municipal and county level, and each sets its own rules governing public access. These are the records that prove to be the initial basis for any asset search.

Check:

- County Assessors Office
- Real property valuation records
- County Records Office
- Property records and deeds
- County Court Records
- Bankruptcy, liens, judgments, business licensing
- Secretary of State's Office
- Corporation records, UCC filings
- State Motor Vehicle Division
- Motor vehicle information
- State Vital Statistics Office
- Vital statistics, probate records, divorce proceedings records

SEARCH PARAMETERS

Real Property - Best documented of all assets is real property. Records are kept at the county level at the County Recorder's Office or an office devoted to handling the registration of deeds.

Look for quit claim deeds, as these are often filed when a piece of property is transferred to a family member or friend to be hidden.

Market value of real property is not easily determined from tax assessments or mortgage balances. Consult a real estate broker will help to determine the actual value of property in question.

Motor Vehicles - The Department of Motor Vehicles will provide information regarding ownership, normally charging a fee for this data.

Boats - In each state, the natural resources department will have information regarding boats or other water-operated vessels that are owned by individuals or companies.

Aircraft - The registration of aircraft is made through the Federal Aviation Administration. This information is similar in nature to that of motor vehicles.

Corporate Property - Corporations, unlike individuals, have no property exemptions with regard to seizure for payment of debt. Information regarding the corporation's operations and personnel is available from the Secretary of State's office in all states.

THE IMPORTANCE OF UNIFORM COMMERCIAL CODE (UCC) FILINGS

The law requires that a financial statement be filed whenever transactions take place that involve the use of personal property as collateral for a loan or lease. There is much valuable information in UCC filings.

More than 8 million UCC filings are completed each year. Four million parcels of real property are transferred or are used for collateral. Millions of parcels of commercial real estate are traded or sold each year.

Always begin a search of UCC filings in the county where the subject in question resides. These records are indexed by the name of the debtor, and they also list the names of secured parties with regard to the debt.

Banks, leasing companies or individuals who have financially backed a business enterprise are excellent sources of information.

UCC filings remain active for a minimum of five years, but they can be extended. The filing in question may include a copy of a loan application from the secured party or a copy of the loan check made out to the debtor. Payroll checks, stock dividend checks, rental income checks and other sources of personal revenue may turn up.

LOCATING BANK ACCOUNTS

Many people of means have more than one bank account, insurance policies, brokerage accounts or safety deposit boxes. An individual tax return is a good source of information regarding any type of account that pays interest. A subpoena is required to retrieve tax returns.

A bank account is highly liquid and is the easiest asset to attach. Question: Does the person who owes the money have an account at a particular bank? Answer: There is no central database that maintains bank account numbers.

How to Investigate - Investigative Professionals has been conducting thorough background investigations since 1996 for individuals, employers, property owners and managers, company executives, financial institutions, universities, and law firms. Read Complete Article

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Published - May 2010