In our previous two posts we have discussed the unfortunate prevalence of hiding marital assets during divorce and explained some of the more common methods of concealing or secreting marital assets. In this post, we highlight ways to find these hidden assets before finalizing a divorce.
At the outset, we should note that uncovering hidden assets can be a challenging and expensive proposition that requires a lot of hours of detective work. So, unless you have strong reason to believe large assets are missing, you might not want to invest in the endeavor.
A good way to begin to tell if your spouse might have hidden assets would be to gather the list you prepared for your insurance company that lists your personal property in the event of a complete loss due to fire. If you cannot locate several items on that list, you might have reason to suspect the items have been hidden and you should bring that to the attention of your attorney.
Another common tactic to uncover hidden assets involves public searches of records, everything from personal property taxes to real estate taxes to corporate record filings and see if your spouse’s name or business is attached to something you do not recognize. If you discover a company in which your spouse is an officer or a property tax payment for a vehicle you have never seen, you probably have found a hidden asset.
Tax returns can be very revealing. For example, state and local taxes are deductible on federal tax returns; so if you see deductions for places that do not make sense, particularly from out of state, you have reason to investigate. You may also see interest deductions for bonds or stock transactions not in your marital portfolio. Did your spouse report a distribution from a retirement account, a distribution you never saw? Do you see suspicious deductions from business names you do not recognize? All of these items will be on your returns hiding in plain sight.
Your next stop should be bank and credit card statements, looking for purchases you do not recall or in suspicious amounts, especially any cash withdrawals or transfers.
Finally, just take a look at your spouse’s lifestyle – are the clothes a bit more upscale, the dining out more frequent, the purchases a bit more extravagant? Any hint of a change in lifestyle, either more or less from the norm, could indicate an attempt to hide or convert marital assets.
We cannot cover every method of concealing marital assets in a post, but if you discover red flags from these suggestions, you definitely will want to consult with your attorney about a more ambitious investigation.
If you have questions about hidden assets and divorce, contact us – we can help.