Hidden Assets in Divorce

Guest Post!

By BJ Mann: Assets, Business Valuation, Financial Assets, Honesty, Income, Separation Agreement

Is Your Spouse Hiding Assets from You?

As you go through your divorce, perhaps you have a growing uneasiness about the financial picture your spouse has provided. The numbers don’t quite add up, or your spouse’s explanation doesn’t seem to cover the situation. You start to wonder, is he or she hiding assets from me?

Clues That May Lead to Hidden Assets

Here are some clues that may mean your spouse is not being completely honest with you.

Your Spouse Is Behaving Differently

Sudden secrets. Your spouse has always shared information with you about your family’s finances. Suddenly, they won’t give you any information.

Pressure to sign. Your spouse comes to you with documents to sign, asking you to sign them right away without reviewing them.

Income vs. lifestyle. Your spouse insists that he/she is not making much money. Then they make extravagant purchases that do not show up on your credit card statements.

Unfamiliar bank or credit card accounts. You receive statements or correspondence for financial accounts that you have no knowledge of.

Denied account access. Your spouse controls online access to family accounts and will not give you the login information.

Expensive items are missing. A spouse who wants to shield property during a divorce may take items like jewelry, art, or collectibles from the marital home and hide them elsewhere.

Your Family Finances Are Not What You Expect

Unreported cash income. If your spouse is a server, tour guide, hair stylist, masseuse, or someone else who receives cash tips or cash payments, they can simply underreport their earnings and stockpile the rest away. The same is true if your partner earns money from a hobby or side gig. Keep track of your spouse’s income, if you can, and see if it suddenly drops when divorce enters the picture.

Surprise debts or gifts. Your spouse decides to pay off a big debt, but you had no idea this debt existed. Chances are your spouse says this debt is to a friend or family member, and they’re being paid in cash. This may be a “shell game.” The friend is going to hold onto this cash and return it to your spouse once your divorce is final.

Sudden large withdrawals. Your bank statements show large cash withdrawals without any explanation from your spouse.

Custodial accounts. Your spouse creates a trust or bank account with a large sum of money, placing it in the name of one of your children and using the child’s Social Security number. He or she names himself/herself as the sole trustee for this account.

Suspicious charges. You find charges on your spouse’s credit card for large-ticket items such as art or furniture, gifts, hotel rooms, college tuition, rent, or travel, when none of this activity is for you or your family.

Undisclosed accounts and investments. Often one partner handles the bulk of the finances in a marriage. If a divorce looms on the horizon, this partner might set up new accounts or purchase investments (stocks, real estate, etc.) without telling their spouse. They don’t disclose them during the divorce, hoping to keep those assets .

Delays in bonus payments. Your spouse reports that his employer is not giving bonuses this year or that he/she is delaying the bonus, when you know the company has done well.
If Your Spouse Owns a Business

Failing business. Your spouse tells you repeatedly that the business he or she owns is having a terrible year, so there is little or no money. You have seen other evidence, however, that the business is doing well.

Spouse says the business has less money than it does. For example, they may wait until after the divorce is finalized to make lucrative deals or may pay salaries to people who don’t exist.

Steps You Can Take to Get Correct Information

If you see this kind of behavior and you suspect that your spouse is not being honest with you, it may be time to get help from specialized professionals and/or the legal system.

Discovery in Divorce

Discovery is the process by which parties in a court case can obtain information and evidence that may be relevant to the specific facts or allegations in their case. Discovery is also commonly known as the “information gathering” stage of a case.

Through your attorney, you can issue requests for a wide variety of financial information from your spouse. If they refuse, you can invoke court procedures to compel them to provide the data. If your spouse still refuses to comply, they may face legal charges.

Subpoenas may also be used to obtain the information directly from the bank or other financial institution holding the account(s).

Hiring a forensic accountant or a private investigator may be necessary. “Forensic” means “appropriate to present in court.” A forensic accountant collects, analyzes and presents information about a financial situation in a way that can be used as evidence.

The Special Circumstance of Financial Abuse

If your spouse controls your access to money by controlling your spending, stealing your money or credit, hiding assets, or preventing you from getting or keeping a job, the situation has escalated into financial abuse.

Summary

Divorce can be hard enough without the added emotional and financial burden of determining whether your spouse is lying about your marital financial situation. If you suspect that might be happening, talk with your attorney about ways to determine the truth and bring in specialized help as needed.