Getting Divorced? Learn the techniques that soon-to-be exes can use to hide income and assets.
Be aware. It is common for one spouse to usually control the family assets, income, investments, be the majority breadwinner, make the decision on how money is spent and most importantly, in charge of financial documentation.
If you are the spouse with lesser financial involvement in the marriage look for these schemes or occurrences, potentially signaling that your spouse is hiding money and assets.
1 Large ATM withdrawals without adequate explanation of how the money was spent.
2. Money hidden in unusual places (garage, shed, basement or if your spouse is self-employed, at his/her place of work).
3. Your spouse is suddenly making no-paper “loans” to trusted friends or family.
4. Look for signs of a safe deposit box. (You can also ask the branch manager, if you have a good relationship with him/her. They may give you information on other independent accounts your spouse may have opened.)
5. Depositing checks but withdrawing a large portion of the check amount.
6. The sale of assets but no deposits to known accounts.
1. Purchasing items that are easily overlooked, e.g. tech toys, small pieces of art, valuable home decor items…
2. Under-reporting income on joint filings, thereby making you a party to fraud (decreasing the likelihood that you would report this criminal act).
3. Secretly having an employer withhold earnings, bonuses or commissions. (Be particularly aware to look into this if there will be a possible child support or alimony request. Once the action is settled based on the lower reported income, it becomes very difficult to obtain a court order changing the amount of child support or alimony.)
4. Overpaying creditors. Many financially savvy spouses will intentionally overpay creditors (e.g., the IRS), knowing full well that they will receive a refund when requested, post-divorce.
5. Placing accounts in others’ names. It becomes very difficult to argue a “gift” that a spouse gives to a child or other family member is impermissible.
6. Giving assets to family members or trusted friends at well below market value.
7. Starting a “business” with a trusted person; thereby excluding it from joint assets.
8. Hiding jewelry and other small valuables in unusual places (such as the featured “socket safe”).
There are many more scams out there that truly vindictive spouses will attempt during a divorce. Make sure you hire a reputable forensics accountant. The expert’s fee is well worth your piece of mind and quite often, large sums of hidden money and assets.
In a divorce situation, when you are looking out for number one, you are making the right decision. If all things had been fair to begin with, the split-up would not be in the making.
Our Operatives: Street smart; info savvy.
As always, stay safe.
- Divorcing Billionaire Tries To Hide Assets With $88 Million Apartment Purchase (blogs.lawyers.com)