Where to begin the hunt for hidden assets during a divorce
This article looks at some of the most common ways former spouses hide assets during a divorce.
Dividing marital property is one of the most important steps in any divorce. However, if one spouse is not fully informed about how much marital property is actually available then that division cannot be fairly executed. That’s why hidden assets are such a problem in divorce cases, especially for high-asset estates. Accusing another spouse of hiding assets is a serious accusation and one that should only be made with plenty of evidence to back it up. Below is a look at some of the signs that an ex-spouse may have been concealing assets in order to get a better divorce settlement.
Begin with tax returns
As Financial Advisor magazine points out, perhaps the best place to begin any hunt for hidden assets is with the tax returns. Looking back at least five years could reveal some surprises, especially if it was the other spouse who primarily handled the couple’s taxes. Some things to look out for are real estate, capital gains, itemized deductions, and gambling losses. While none of these items suggest any wrongdoing in and of themselves, they could provide clues about where to investigate further, especially if any of the items seem suspicious or unfamiliar.
Small business expenses
If the former spouse also owns a small business then that business could be used to conceal certain assets. What often happens is that business expenses will suddenly increase just prior to or during a divorce or income will decrease. If there’s no rational explanation for these sudden changes, the ex-spouse may be manipulating the business’ finances in order to make himself appear in a worse financial situation than is actually the case. That, in turn, could lead him to having to make lower spousal maintenance payments or it could leave the other spouse with a smaller share of the marital estate than they would otherwise receive.
As Forbes points out, there is plenty of other suspicious behavior that could be indicative of assets being hidden. Those behaviors may include keeping a safe deposit box in the house, changing passwords on the computer or certain accounts, keeping a P.O. box, buying items, such as antiques and collectibles, that may be hard to value, or transferring stock or assets to a friend or family member.
Getting legal advice
Uncovering hidden assets is not easy and it will usually require the assistance of a forensic accountant. Anybody who suspects that their former spouse may be concealing assets should get in touch with an experienced family law attorney as soon as possible. An attorney can help clients understand whether their suspicions are worth pursuing and, if necessary, bring in a forensic accountant to help uncover assets that the other spouse may be hiding.