When faced with a divorce, you are concerned about many financial issues. You are wanting to make sure you receive the right amount of child support. You are wanting to make sure that you receive enough spousal support so you can support yourself post-divorce. You are also wanting to be sure that you receive a fair share of your marital property.
Unfortunately, you may discover during the divorce process that your spouse is not the person you thought he or she was when you decided to marry. This new person may cause you to worry that your ability to reach a fair division of marital property is being hindered by your spouse’s attempts to hide money or other assets so that he or she receives more than you do in your final property settlement.
This can be a significant concern for many spouses who are going through a divorce. If you have been the stay-at-home parent who was focused on childcare and other household responsibilities, you may not be as well-informed about your family’s finances as your spouse. This can put you at a disadvantage, especially if you do not have all the information you need about your spouse’s annual income, your monthly living expenses, or the different types of assets you and your spouse own. If you are concerned that your spouse is attempting to hide marital assets during divorce, here are 10 tips on where you can look to uncover these issues:
Where to Look for Hidden Assets During Divorce
1. Income Tax Returns
While your spouse may not be afraid to lie to you, he or she could be more fearful if he or she lied to the Internal Revenue Service in one or more income tax returns. Obtaining a copy of the past three to five years of income tax returns and comparing them can help you locate assets that you did not know about. Hiding income from the IRS can lead to serious penalties, including hefty fines or even prison time. Because of this, most people properly report their income when filing their annual income tax returns. Whether you and your spouse have filed taxes jointly or separately, you should be able to access the returns that were filed in the past. If not, you should contact the IRS and request transcript returns for the past three to five years. By closely examining these tax returns, you can search for inconsistencies between the income that was reported to the IRS and the financial disclosures made by your spouse during the divorce process.
2. Checking Account Statements
Checking account statements can show a wealth of information regarding your spouse’s income, expenses, unusual deposits, or withdrawals. You should be able to access information about any joint bank accounts you have with your spouse, and during the discovery process, you can obtain information about individually titled accounts as well. By reviewing bank statements, you can determine how marital funds were used to pay monthly expenses, make purchases, or transfer money to others. You may even discover that marital money was used to purchase expensive real estate or other assets only in your spouse’s name.
3. Canceled Checks
Canceled checks can be very helpful, as they may reveal that your spouse made purchases that you were unaware of or transferred marital money to friends or family members to avoid dividing the full value of the checking account with you during the divorce process.
4. Savings Accounts
By reviewing monthly statements for any savings accounts you and your spouse own together or separately, you can determine whether any unusual deposits or withdrawals were made. Large deposits into a savings account only in your spouse’s name may mean your spouse is concealing a source of income earned during the divorce process. The source could be a small dividend check received through ownership of stock or a large bonus received from your spouse’s employer. An unfamiliar withdrawal by your spouse may be an attempt to conceal marital assets that should be included in the final property division in your divorce.
5. Credit card statements
Credit card statements can show you what your spouse is spending his or her money on, which could include a person he or she is secretly dating or assets that you do not know about. An overpayment of the account could result in your spouse having an available asset in the form of a credit on the account that should be split with you.
6. Loan Documents
If your spouse borrowed money from a mortgage company or bank, you could receive a copy of their loan application as well as other documentation related to the loan through discovery during the divorce case. These documents could provide you with a list of all assets reported by your spouse when he or she applied for the loan. The estimated values of these assets could then provide you with a blueprint of what property should be divided during the divorce process, as well as the financial resources available to your spouse including any separate (non-marital assets) he or she owns. All of this information can influence the decisions you make during the asset division process.
7. Business records
If your spouse is an independent contractor or owns a business, he or she could be hiding assets or income from you or paying fraudulent loans that will secretly be repaid through his or her business.
8. Public records
By searching public records, you may be able to discover real estate, vehicles, and recreational vehicles that your spouse purchased behind your back.
9. Lifestyle Analysis
If you are uncertain about the extent of your family’s finances, you may want to consider the lifestyle of your spouse. Does his or her reported income to the court match the house, car, clothes, and vacations taken? If you believe your spouse’s lifestyle is more lavish than their reported income could support, your spouse may be hiding assets from you. A forensic accountant may be able to help you analyze the information available to you and determine whether it matches up with the lifestyle of your spouse and your family.
10. Get Help Uncovering Hidden Assets
You may be able to work with a forensic accountant or another type of financial expert during the divorce process to uncover any hidden assets and gain a complete understanding of your family’s finances. However, your best resource is usually your divorce attorney. An experienced divorce lawyer can help you determine the best way to search for hidden assets and then advocate on your behalf throughout the divorce process to make sure you will be able to reach a fair settlement.
Should you need the advice of an experienced divorce attorney or have questions or concerns about your situation, know that we are here to help and ready to discuss those issues with you.