Is Your Spouse Hiding Assets From Your Divorce?

Make sure you get your fair share of marital assets with help from a skilled divorce attorney.

Asset and property division is often one of the most contentious aspects of a divorce. Even when both spouses are cooperating with the divorce and being completely open about their finances, it can still be challenging to classify everything appropriately as either separate or marital property. Often, the assistance of a forensic accountant is needed to retrace the paths of things like marital income used to pay mortgages on homes bought prior to the marriage and determine what each party’s fair share is.

Needless to say, things only get more complicated when one spouse attempts to hide assets from the other. This could be done in an effort to devalue the entire marital estate, or in an attempt to decrease the amount of child support or spousal support that could possibly be ordered.

Here are 7 sneaky asset-hiding schemes that a forensic accountant could help you look for leading up to your divorce proceeding.

1.  Separate Accounts. One fairly common maneuver is for one spouse to open a separate account in their name only and then funnel some portion of joint income or assets into it. Then they will simply not mention this account when it comes time to declare their assets in the divorce.
2. “Loans” to Friends. Another possible attempt to hide assets would be giving a “loan” to a friend or relative, for the sole purpose of having that person hold the assets until after the divorce.
3. Deferring Tax Refunds. Sometimes, when one spouse knows they are going to be getting divorced soon and they have a big IRS refund heading their way, they give the IRS permission to hold the refund and apply it towards next year’s taxes. This only works if the spouses file jointly and if the spouse who wants to do the hiding is the primary taxpayer.
4. Postponing a Raise or Promotion. Accepting a raise or promotion right before a divorce can result in higher child support and alimony payments. Sometimes sneaky spouses will ask for their raise or promotion to be delayed until after the divorce so that any payment obligations will have to be calculated based on their old income level.
5. Not Including Retirement Accounts. This method of hiding assets actually happens accidentally as well as deliberately. Make sure you know about all of your spouse’s 401ks, 403bs, etc. from various employers so you can be sure they get included in the asset division.
6. Devaluing the Family Business. When one spouse is in control of the family business and the other has no idea what’s going on, it’s relatively easy to manipulate things so that the business appears much less profitable than it really is. For example, your spouse could delaying invoicing so that the business suddenly doesn’t have any cash coming in, or they might start inflating business expenses to make the business look less profitable.
7. Bitcoin Transfers. This strategy is very similar to having a separate bank or investment account, with the difference being that bitcoins (a digital currency) are extremely hard to trace because they are held in an anonymous account.

Before you sign any divorce agreement, you need to make sure it provides for a fair and equitable asset division. Hiring an experienced divorce attorney as well as a forensic accountant can be invaluable for giving you peace of mind on this issue.