We hope you never suspect your spouse is hiding assets during your divorce. đź’°đź’°đź’°
But if you do, you’re not alone. There are ways to protect yourself. Financial dishonesty in divorce is more common than you might think, and uncovering hidden assets can make a significant difference in achieving a fair settlement.
How does one spouse hide money from the other in divorce?
Some spouses hide money or property to keep more for themselves and avoid sharing it during divorce proceedings.
Courts call this fraud. Consequences can be severe (think overturning a divorce judment or losing all assets.) Accidental omissions can occur, but others are deliberate and premeditated—especially in high-net-worth divorces or when one partner owns a business.
Common tactics 👇
- Transferring money to friends or relatives
- Opening secret accounts
- Underreporting income
- Delaying bonuses, raises, or profits until after the divorce
- Omitting or misstating information in financial disclosures
- Using joint funds to pay off separate debts
- Inflating business expenses or “paying” fake employees or vendors, intending to recover the money later
Red flags and where to look for the money
1. Income Discrepancies
Compare reported income with bank deposits over the past year or two. Do the numbers match?
2. Business Finances
Review at least five years of tax returns. Look for changes in salary, unexplained expenses, or unusually high retained earnings.
3. Canceled Checks
Examine several years’ worth of canceled checks for unaccounted-for large expenses.
4. Retirement Accounts
Check for large loans or withdrawals and confirm how they were used. Are there unexplained patterns?
5. Children’s Accounts
Investigate accounts opened in your children’s names. Are they being used to hide assets?
6. Investment Accounts
Interest on certain bonds or other investments might not appear on tax returns.
7. Public Records
Search local and state public records for undisclosed properties or liens.
8. Loan Applications
Review financial statements submitted to banks for credit lines or loans. Do they reveal undisclosed assets?
9. Tax Refunds
Find out who received them, where they were deposited, and how they were used.
10. Tax Returns
Tax returns are gold mines for hidden information. Look for:
- Interest and dividend income from undisclosed accounts
- Gains from selling assets
- Retirement plan distributions
- Stock option exercises
- Deductible mortgage interest that doesn’t match your records
- Miscellaneous deductions that hint at hidden assets
Hiding assets during a divorce is unethical and illegal.
If you suspect your spouse is concealing money or property, start by consulting your divorce attorney. They’ll guide you through the divorce discovery process. It’s where both spouses are required to provide financial documents like tax returns, account statements, and loan applications.
For more complex cases, work with a forensic accountant. They’re professionals who specialize in uncovering hidden assets by analyzing financial records and identifying discrepancies. Check out Find A Professional for recommendations, or ask your lawyer for a referral.
Even without a forensic accountant, there are plenty of ways to uncover hidden assets. With the right team and strategy, you can ensure a fair settlement and protect your financial future.
🚨 Get Me Outta Here 🚨