In any divorce, both spouses should worry about the other spouse trying to dissipate or hide assets that are properly considered marital property. In this post, we will consider some of the common ways spouses try and hide assets.
First, a spouse can overpay creditors, claiming to the other spouse it was to pay off a debt or a missed payment, when in fact the spouses had been current. Subsequently, the overpaying spouse will apply for a refund of the overpayment, without the other spouse’s knowledge. Fortunately, these overpayments can be discovered by reviewing all of the statements for credit cards, mortgages or other loans.
Second, a spouse can become interested in art or antiques, purchasing seemingly innocuous items that actually have significant value. The spouse will claim these in the divorce with a low value, only to turn around after divorce and sell them for a much greater sum.
Third, spouses should always be on the alert for unusual financial activity. Each spouse should have familiarity with the regular bills each month and how they are paid. Any additional payments should raise a red flag, as would additional credit card purchases or requests for a higher credit limit. Some financial activity can be very tricky. For example, if a spouse is getting a bonus at work, that spouse may ask the employer to disguise it by label, and when the check comes through, immediately withdraw the bonus.
Fourth, spouses may try and hide statements for credit cards or other accounts. It could be as easy as making them all paperless and going to a new email address. If you cannot locate an account, contact the company and inquire.
Finally, some spouses will take advantage of Bitcoin or other cryptocurrencies, which are nearly untraceable online money systems. Bitcoin will work through trading sites like Coinbase or Paypal, so you would want to investigate all online accounts associated with these types of trading sites.
You can discover missing assets most easily by looking at the financial statements submitted by your spouse. If you see items you know exist but are not listed, you will want to investigate. Similarly, if you see values of assets that differ from your expectations, you will want a full accounting.
The key to asset hiding is twofold: watch for red flags on a regular basis, with vigilance to all known accounts; and tracing activity in all accounts as far back as necessary.
If you have questions about hiding assets in a divorce, contact us – we can help.