If one spouse begins planning for divorce before the other, he or she may start hiding money and other assets so that they won't be discovered when the property division negotiations begin. While people are supposed to disclose their assets honestly and fully during divorce, not everyone does.
If you have reason to suspect that your spouse isn't being completely forthright about his or her assets, particularly if you haven't been the one in the marriage handling the finances, your attorney may recommend hiring a forensic accountant to find hidden assets. What the forensic accountant uncovers can more than make up for the cost.
Common Ways That People Hide Assets
You may be surprised at some of the most common sources of hidden assets. Sometimes people will spend money on expensive things like artwork, antiques, furniture and jewelry. They may keep it at the office or someplace where their spouse won't find it or they may underreport its value.
If your spouse owns a business, he or she may pay money to a made-up employee or perhaps a family member or friend and then take it back after the divorce. They may also opt to get paid in cash by customers so that they don't have to report the income.
Business owners may also delay signing lucrative contracts until after the divorce so they don't have to share the proceeds with their spouse. People who are paid bonuses or who receive part of their income in stock options may delay these payments so that they don't have to be split.
There are investments such as certain types of savings and municipal bonds that don't pay interest for some time. Spouses sometimes funnel cash into these investments. People have also been known to set up custodial accounts in their children's name, using their kids' Social Security number.
Be Careful About Doing Your Own Sleuthing
Some spouses who are contemplating divorce decide to splurge on expensive gifts for a boyfriend or girlfriend such as cars and jewelry rather than share the money with their soon-to-be-ex. That's why it's essential to be vigilant about watching your spouse's personal and business financial activity if you have legal access to it.
Check with your attorney first to ensure that you aren't doing anything that could put you in legal jeopardy. A forensic accountant, as noted, can do a particularly thorough job of finding hidden assets and helping you get what is rightfully yours in a divorce.
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