How to Tell if Your Spouse is Hiding Money, Property or Assets in a Divorce
It’s often been said that “all’s fair in love and war.” And, unfortunately, a divorce can often be more war than love.
No one wants to believe that their spouse is being dishonest with them about property or finances. But, unfortunately, husbands and wives do frequently conceal assets from one another – especially during a divorce. As an experienced Oakland County divorce attorney, I am sad to say that hiding assets happens much more frequently than you may think.
In this article, I set forth some tips for keeping an eye on your finances prior to or during a divorce – and some tell-tale signs that can help you determine if your spouse may be hiding “marital assets”.
Keep an Eye on Mortgage, Bank Account & Credit Card Statements in a Divorce
As an experienced Oakland County divorce attorney I have handled hundreds of cases where quite a bit of money or property was at stake. Unfortunately, I am often surprised by how little one spouse (either husband or wife) knows about the family finances and assets.
Often times a husband or wife has no idea how much is in the bank accounts, how much credit card debt is owed, or even if the mortgage or car note is being paid – because the other spouse “handles the bills”.
Checking these statements as they arrive in the mail – and keeping copies – is essential to receiving fair treatment in a divorce settlement. An easy way to “keep copies” is simply to photograph the statements using your cell phone. These can later be shared with your divorce attorney – and even printed out and submitted to the Court if necessary.
Even if you do not have access to the paper statements for these bills and accounts, you should be able to create an online account to keep tabs on all bank accounts, credit cards and mortgages that are in your name. These statements can also be printed out and kept in a safe place – at a friend or family member’s house – for future reference if your spouse is hiding assets or financial information from you.
Telltale Signs Your Husband or Wife is Hiding Money, Assets or Property
Once you have access to statements and bills, there are some specific things you should look for. If you suspect that your spouse is starting to move assets before or during a divorce, there are some common methods that divorce attorneys often look for.
Hiding Divorce Assets: Unpaid Bills
Sometimes a spouse who manages the finances will simply stop paying a mortgage, a spouse’s car note, or other bills – while pocketing the cash. It can be a rude awakening for a husband or wife to realize during a divorce that their house is actually in foreclosure or their car is in danger of being repossessed . . . and the cash they thought was being used for bills is now gone or hidden.
So, keeping an eye on your statements is always wise – especially when your spouse always “handles the bills.”
Hiding Divorce Assets: Transferring Money
Unfortunately, transferring money to a new, separate bank account is probably the most common method spouses use to hide assets from their wife or husband. Often times spouses have statements for hidden accounts going somewhere else than their home, such as an office or post office box.
While you may not have access to a new bank account that is only in his or her name, you can look for telltale signs, including unexplained debits or transfers from your existing accounts. If these transfers or debits are made from a joint account with your name on it, you are completely within your legal rights to call the bank and ask specifically where the money has been transferred.
Hiding Divorce Assets: Transfers to Friends or Family
Often times a spouse has a close friend or family member to whom they “sell” or transfer property to keep it out of the divorce proceedings. For example, a husband may suddenly sell a boat, a cabin, or other family asset to their brother or best friend. In other situations a spouse may say they are “loaning” or “giving” a large sum of cash to a family member or buddy. In these cases, the two may have a side-agreement in place where the property will be given back after the divorce is final – so that the asset does not have to be divided between you.
Often times the crafty spouse may claim the sale was necessary for “tax purposes” or “cash flow”. In other cases they will characterize the transfer as a generous “gift.” Whatever the case, be very alert for any sudden “out of the blue” transfers or sales to friend and family.
Employer Collusion in Hiding Marital Assets
Sadly, if a spouse has a strong personal relationship with his or her employer, the employer may “juggle” or “delay” their compensation to hide assets from you until after the divorce. An employer may agree to hold off on a raise, a commission, a bonus, or even a promotion until the divorce is finalized – in an attempt to protect the income from being considered in the divorce.
Self Employed Spouses Hiding Divorce Assets
If your spouse owns his or her own business, there are even more opportunities for him or her to hide or “shield” marital assets in a divorce. For example, the business-owner spouse may intentionally delay invoicing clients until after the divorce – so that the income does not have to be split between you.
Self-employed individuals may also suddenly stop taking – or dramatically reduce – income for themselves from the business. The money may be squirreled away in a hidden account – or may simply stay in the business account with the spouse’s intention of taking a large bonus or increased salary after the divorce is final.
Because of the many avenues available to self-employed individuals in a divorce, it is very important for the other spouse to consult with a divorce attorney who has handled many self-employment divorce cases. An experienced divorce attorney has an arsenal of tools – such as calling in skilled accountants and business-valuation experts – to ensure that you receive your full and fair share of the marital assets from a self-employed spouse.
Cash Back & Gift Cards to Hide Assets in a Divorce
Spouses can be very creative when plotting for a divorce. As an experienced divorce attorney, I have seen spouses who have secretly stashed away thousands of dollars taken as “cash back” at drugstores and grocery stores. If your spouse is adding hundreds of dollars in “cash back” to the grocery or pharmacy bill every month, you may not notice the deductions thinking it is just the effect of inflation.
Fortunately, most bank statements now separate out cash-back from the actual accompanying purchase. So keep a close eye on your debit card statements.
Similarly, but easier to conceal, hundreds of dollars’ worth of various gift cards can be purchased at most grocery stores and drugstores. This slow drain of cash can quickly accumulate into thousands of dollars in untraceable gift cards that can be discreetly saved by your spouse for future use. So be mindful of your household spending – and alert for any sudden or unexplained increases.