Hiding assets during a divorce is sneaky, unethical and illegal –but it happens much more frequently than most would expect.
What to look for:
Purchase items that could easily be overlooked or undervalued. Maybe no one will notice that expensive antique/carpet that’s now at his office? Were you wondering why they recently made several significant additions to his coin/stamp/art collection?
Stash money in a safe deposit box, somewhere in the house or elsewhere. Think through your spouse’s recent habits and activities. Does anything lead you to believe they is hiding assets in actual cash?
Underreport income on tax returns and/or financial statements. If it’s not reported, it can’t be used in a financial analysis.
Overpay the IRS or creditors. If your spouse overpays, they can get the refund later, after the divorce is final.
Defer salary, delay signing new contracts and/or hold commissions or bonuses. This sneaky trick means this income won’t be “on the books” during the divorce proceedings.
Create phony debt. Your spouse can collude with family members and/or friends to establish phony loans or expenses. Then, they can make payments to the family members or friends, knowing that they’ll get all the money back after the divorce is final.
Set up a custodial account in the name of a child, using the child’s social security number. They could also use his girlfriend’s social security number, in which case it might be difficult to locate the account.
Transfer stock. Your spouse may transfer stock/investment accounts into the name of family members, business partners or “dummy” companies. After the divorce is final, the assets can be transferred back to him.
The list goes on and on . . . and it certainly begs the question: Why would a spouse do any of these things? There are many possible reasons. They may fear not having enough money after the divorce. They may feel they are getting revenge for an infidelity. Maybe they are just greedy and feel that they deserve it! Whatever the reason, hiding assets, income and debt is not only unethical; it’s also illegal and subject to severe penalties if discovered.
But even so, the burden of proof is often on the spouse with less financial resources (typically the woman) to prove any such unscrupulous behavior.