Let’s talk about an uncomfortable truth in divorce proceedings: Financial deception happens more often than you might think. While we often hear about husbands hiding money, the reality is that both spouses – regardless of gender – can be guilty of attempting to conceal assets during a divorce.
When marriages break down, something interesting happens to people’s financial behavior. The same person who once happily shared everything might suddenly start squirreling away money, almost like they’re building a secret nest egg for their post-divorce life. It’s not just about greed – sometimes it’s driven by fear, anger, or even a misguided sense of justice.
So how do people typically try to hide money from divorce courts? Let’s talk about some common strategies and, more importantly, how to spot them.
Secret Bank Accounts: The Classic Move
Think of secret bank accounts as the financial equivalent of a hidden diary. These accounts might be opened in another state, under a business name, or even in a different country. If you suspect your spouse has hidden accounts, there’s good news: banks have paper trails. These paper trails show where money came from and where it went to.
In your divorce, you have the right to get records from any financial institution where your spouse conducts business. Through the legal discovery process, your attorney can subpoena banks for records of any accounts in your spouse’s name or accounts they can access. Here’s what makes this interesting: if you find evidence of transferred money, it’s not just unethical – it could be considered fraud, and those funds can be recovered during settlement.
The Income Shell Game
Some spouses get creative with their income reporting, showing the court a smaller number than what they actually earn. They might arrange with their employer to defer bonuses or commissions until after the divorce, or they might run personal expenses through a business account. They might try to get paid “cash under the table,” knowing that it would be very difficult for you to prove how much they’re actually making.
The key to uncovering this deception lies in careful examination of payroll records, tax returns, and W-2 forms. Sometimes, the lifestyle they lead doesn’t match their claimed income – that’s often a red flag worth investigating.
The Friends and Family Plan
Here’s a particularly tricky strategy: transferring ownership of assets to trusted friends or family members. Picture this scenario: suddenly, that valuable artwork is “gifted” to a sister, or an expensive car is “sold” to a college buddy – with the understanding that everything will be returned once the divorce is final. These transfers can be challenging to track, but there’s usually a trail. Look for recent large purchases where the assets haven’t been listed in divorce disclosures, or unusual patterns of gifting that started around the time divorce became likely.
Creative Business Accounting
For business owners, the opportunities for financial shenanigans multiply significantly. They might manipulate business records, delay client billing, or create phantom expenses. This is where forensic accountants become invaluable – think of them as financial detectives who can spot irregularities in business records that might indicate hidden assets or improper transfers.
Protecting Yourself: The Power of Documentation
Success in uncovering hidden assets often comes down to having comprehensive financial records. Start gathering documents early – bank statements, credit card bills, tax returns, investment accounts, and property records. Pay attention to patterns and changes in financial behavior, especially around the time divorce became a possibility.
Remember, judges don’t like hidden assets. If you can prove that your ex was hiding money… and you have the documents to back you up… you can get a judge to rule in your favor. If you’re really lucky, a judge might even aware the entire hidden asset to you as a punishment for his deception.
A Word of Caution
While it’s important to be vigilant, it’s equally important to approach these investigations carefully and legally. Work with your attorney and financial professionals to ensure you’re following proper procedures. Random accusations without evidence can damage your credibility in court and potentially harm your case.
The goal isn’t to be paranoid but to be prepared and protected. After all, a fair division of assets can only happen when all cards are on the table – and sometimes, you need to know where to look for the cards that aren’t being shown.
