Hiding assets is common in high-asset divorce
Finances are often a source of tension in relationships. An online survey conducted by National Endowment for Financial Education revealed that 76 percent of people had committed “financial infidelity” against a partner with whom they had combined finances, keeping some aspect of their finances secret from their partners. When marriages break down, financial deceptions often continue. Many spouses try to conceal assets in an effort to keep them out of the property division. Hiding assets is particularly common in high-asset divorces, where there is a lot to lose.
Common ways spouses hide assets
There are several ways that people try to hide assets when going through divorce. Some of the more common ways involve taxes, including underreporting income to the I.R.S. and overpaying income taxes. Other people try to manipulate their business transactions so that they look like they have less money, such as deferring their bonuses or putting off closing business deals until after the divorce, paying fake business expenses or creating phony debts to others that will be repaid after the divorce.
Some people simply hide cash in safe deposit boxes, or transfer money into accounts held only in their names. In other cases, people buy expensive items such as art or antiques with marital funds and declare their value to be less than it actually is.
Finding hidden assets
Reviewing records is one of the best ways for people to find hidden assets when negotiating a property settlement. People can compare income tax returns with pay stubs and interest statements from investment accounts to make sure they match. People should also look at bank records to make sure that every paystub can be matched to a deposit in the account. It is often helpful to search public records to see if a spouse has purchased real estate in his or her name only. People may want to look at cancelled checks for paid bills to see if the account numbers on those checks match the known checking accounts. If they do not, then the spouse may have another account that is undisclosed. Reviewing credit card statements can also reveal whether a spouse has made any significant purchases that he or she did not disclose.
Use the services of professionals
People often find forensic accountants useful when trying to find hidden assets. Forensic accountants are trained to review financial statements and discover discrepancies. It is crucial for people to know the full extent of the family’s finances, because it can seriously impact the property division, alimony and child support awards. A seasoned divorce attorney can also be helpful in finding hidden assets and securing a fair property settlement. If you have questions about divorce and dividing marital property, consult an experience divorce attorney who can offer guidance based on your specific circumstances.