Whether due to dishonesty or disorganization, many clients end up in a position where they need to look for hidden assets and income during the divorce process. It is worth taking the time to make a thorough search because the division of assets you agree to in your divorce settlement cannot be changed in most cases. Whether you are dividing assets outside of court or asking a judge to make the decisions, you need to ensure that all financial information is out on the table for discussion.
Some Common Tactics Spouses Use to Hide Assets
Some spouses can get extremely creative when it comes to hiding assets and income in anticipation of divorce. Some tactics our firm has seen over the years include:
- Asking an employer to delay paying a bonus or implementing a promotion until after the divorce is final
- Deliberately overpaying taxes to allow for a tax credit or refund in the future
- Setting up a custodial account in the name of a minor
- Making payment to a friend for a phony debt
- Keeping cash in the form of traveler’s checks
- Buying bearer bonds that do not appear on account statements
- Selling assets to a friend for a low price
- Purchasing insurance policies with a cash value
In addition to these practices, spouses also try all the traditional tricks such as moving money out of a joint account to an individual one, or putting funds in an offshore account, trust, or shell corporation.
Business Owners Have Additional Options for Hiding Assets
When one spouse owns an ownership interest in a closely-held business, their position affords them additional opportunities to hide assets. They might pay wages to a fictitious employee or pay business funds to a relative or friend for services never performed. They might skim off cash or invest in valuable artwork for the office that can be overlooked when the business is valued.
Sometimes a business owner will deliberately delay signing long-term contracts until after the divorce is finalized to keep the value of the business intentionally low. Business valuation affects not only the division of property but also alimony and child support, so measures taken to deliberately lower the value of a business are particularly harmful and unethical.
Strategies to Locate Assets
Any spouse contemplating divorce would do well to find and make copies of as many financial statements as possible. Tax returns, bank statements, pay stubs, credit card bills, and anything related to money can provide a useful starting point for locating hidden assets. For instance, credit card bills can show payments made for valuable collectible items and bank statements could show withdrawals used to purchase cryptocurrency or traveler’s checks. Pay stubs can indicate whether income is being hidden in some way.
In many cases, it is wise to consult a forensic accountant who specializes in locating hidden assets. It is also a good idea to work a divorce attorney who understands complex assets and how to present the situation to the judge for best advantage.
Koiles Pratt Family Law Group Helps When a Spouse Tries to Hide Assets
At Koiles Pratt Family Law Group, our experienced team frequently guides clients to the right resolution in high-net worth divorce cases, and we know how to help when a spouse may be attempting to hide assets. For a confidential consultation to learn how we could assist in your situation, contact us today.
Ready to protect your interests, assets and relationships.
Please contact us to discuss your family legal matters by calling 978-744-7774 or using the form below.
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