Asset Concealment in Divorce: Signs and Solutions
- Signs of deception
- How to uncover hidden assets
- Working with a licensed private investigator or CDFA
Divorce is a time of great upheaval, a period where the foundations of what was once a shared life are shaken. It's an emotional rollercoaster, and unfortunately,
Amidst the chaos, it’s unfortunate but true: Some individuals may attempt to gain an unfair advantage over their spouse in the divorce settlement agreement.
One tactic they may use is asset concealment, a deceptive practice where one spouse hides assets to prevent them from being included in the settlement. This not only undermines the integrity of the legal process, but it also threatens the financial security of the other spouse.
Signs your spouse is hiding assets
A sudden lower paycheck
If your spouse's income suddenly decreases without a reasonable explanation such as job loss or pay cut, they may be deferring salary or bonuses until after the divorce. They could also be channeling funds into a retirement account, offshore bank account, or other place that isn’t immediately visible.
Mailings you don't recognize
Take note of mail from banks or financial institutions you don't recognize. These could be statements for undisclosed bank accounts, credit cards, or investments.
Also, pay attention if your spouse suddenly insists on collecting the mail, especially if this is a change in behavior.
Refusal to discuss money
If your spouse becomes evasive or defensive when you bring up finances, it could be a sign they're hiding something. While discussing money can be stressful, an outright refusal to engage in these conversations is a red flag.
This term refers to any actions that involve secrecy or deception around money or debts in a relationship.
If you discover your spouse has been lying about finances, such as having secret credit cards or loans, it's a strong indicator they might hide assets during a divorce, too.
Some spouses might overpay the IRS or creditors with the intention of getting a refund after the divorce is finalized. This allows them to temporarily "park" money where you won't see it.
Frequent expensive gifts or trips
If your spouse suddenly starts buying expensive gifts for friends or family members or going on lavish trips, they could be attempting to deplete marital assets before they're divided.
Changes in lifestyle
If your partner's spending habits drastically change, or if they start making large purchases, it could indicate that they're trying to move money around.
Similarly, if your spouse's lifestyle doesn't seem to match their income, they might be using concealed assets.
Unexplained assets or debts
If you notice new assets appearing or debts being paid off without a clear explanation, this could be a sign of hidden assets.
How to uncover your spouse’s hidden assets
Discovering hidden assets during a divorce requires diligence and often professional assistance. Here are some places you might find signs:
- Financial statements and tax returns: These documents can reveal a wealth of information. Look for inconsistencies or discrepancies in income, expenses, investments, and deductions. Multiple years of tax returns can provide a clearer picture of your spouse's financial history.
- Public records: Property records, business licenses, and other public documents can unveil assets you weren't aware of. Many of these records are available online or at your local courthouse.
- Online activity: If your spouse is involved in online businesses or transactions, traces of these activities might be found on their computer or smartphone.
- Safe deposit boxes: If your spouse has a safe deposit box you weren't aware of, it's possible they're using it to hide cash or valuable items.
- Personal effects: Sometimes, physical evidence of hidden assets can be found among personal belongings. This could include receipts, bank slips, or even hidden cash.
Working with a PI or CDFA
Private investigators, or PIs, are skilled at conducting investigations to uncover hidden assets. They can use various techniques, from surveillance to forensic accounting, to trace concealed funds or properties. PIs can dig into public records, online transactions, business dealings, and more in their asset search. They can also legally gather information that can be used as evidence in court.
Certified divorce financial analysts, or CDFAs, specialize in financial issues surrounding divorce. They can provide a comprehensive analysis of your financial situation, including identifying potential tax implications and long-term financial planning. A CDFA can help trace assets and income, interpret financial data, and even create post-divorce budget projections.
A PI or CDFA can provide crucial assistance if you suspect your spouse is hiding assets. Their expertise can ensure a thorough investigation and help you achieve a fair settlement.
FAQ about hidden assets in divorce
Is it illegal to hide assets in divorce?
Yes, it is illegal to hide assets in a divorce. At the beginning of every divorce, spouses are required to disclose all of their assets, including their monthly income. Any attempt to conceal or misrepresent marital property is considered illegal and can have serious consequences.
What are the consequences of hiding assets in divorce?
The consequences of hiding assets in a divorce can be severe. The court may require a guilty spouse to pay the other spouse's legal fees, grant higher alimony, or even award the full value of the hidden assets to the other person. The offending spouse may even lose up to 100% of the asset.
If you’re grappling with your divorce case, we can help. At Hello Divorce, we provide a number of services, including legal advice, CDFA assistance, and online divorce plans. To learn more, please schedule your free 15-minute phone call with one of our account coordinators.