It is common for one spouse to have control over the money in a marriage. And it’s just a fact that this is still most often the husband. Maybe it’s because he’s the main breadwinner, or maybe he’s just better with money and budgeting.
If you haven’t been in control of the money and you haven’t been keeping an eye on things… and now you’re getting a divorce… you’re probably worried about whether there is missing money.
Let’s talk about some of the schemes that are commonly used to hide assets and income.
- Stash cash – Your husband might stash money around the house, in a safe deposit box, or with trusted friends or family. He’s got money that he’s not putting in a bank account, and he’s hoping you won’t even know it exists. Or he might be taking money out of your bank account and hiding it. Look for unexplained withdrawals from your joint accounts, especially round numbers like $500 or $1,000 that might indicate he’s building a cash reserve.
- Purchase items that are easily overlooked or undervalued – If your husband bought another home or car, you’d notice! But are you paying attention to things like artwork, collectibles, valuable home furnishings, or electronics? Many spouses don’t pay attention to things like this, but they’re an easy way to reduce the cash in the bank account while hiding an asset that has value. Watch for sudden interests in collecting items like coins, stamps, or sports memorabilia that might actually be worth significant money.
- Underreport income on income tax returns – Your husband (or wife!) might deliberately reduce what they’re reporting on the tax return so you can’t get the support you are entitled to. This is particularly common with self-employed spouses who can manipulate their business income. Compare past years’ tax returns to spot any sudden drops in income that don’t make sense with his career trajectory.
- Have the employer withhold pay – Whether it’s regular wages, salary, commission, or a bonus…. it may be possible to have your job NOT pay you and wait until after the divorce is over. This is especially a risk with a small business, where your spouse might be very friendly with the owner. Be suspicious if your spouse suddenly claims his bonus was canceled or a commission check was delayed, especially if this happens close to divorce proceedings.
- Overpay creditors – Your husband could pay extra money to the IRS or a credit card, leaving that money there and waiting to request a refund until AFTER your divorce is over. He’s hoping you don’t realize there is value sitting on that account. Check statements for unusually large payments that go beyond the minimum or regular monthly payment amounts.
- Open an account in someone else’s name – It’s not uncommon to open a bank account in the name of a child, brother or sister, parent, or close friend. The intention is to hide money in this account and then get it back after the divorce is final. Be alert for mail coming to your house addressed to your children or other family members from financial institutions, or notice if your husband seems unusually interested in getting the mail first. Look for transfers from your bank account to accounts that you didn’t know about.
- Transfer assets to others – Just like the bank account, it’s not hard for your husband to put assets in the name of his friend, sibling, or parent to hide the fact that he owns it. He might “sell” the asset to them at a very low price, or even just give the asset to them! Watch for valuable items disappearing from your home or property being transferred with explanations that don’t quite add up.
- Loan money – Another trick is to “loan” (i.e. GIVE) money to a family member or friend. And suddenly the person defaults on the loan and your husband says he’ll never get the money back. This fake loan serves as a way to temporarily move money out of marital assets. Pay attention to large sums leaving your accounts with vague explanations about helping family members or friends in need.
If you want to learn more and figure out if your spouse is hiding money and other assets, check out our article How to Find Your Husband’s Secret Accounts.
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