Hiding assets during a divorce is sneaky and illegal, but it does happen. Spouses will attempt to hide assets in similar fashion, whether your marriage financial situation is complex or simple.
If you are in the midst of a divorce, or are considering a divorce, then you need to be alert for financial deception by your spouse. Such financial deception or dishonesty can dramatically affect the assets that you obtain in equitable distribution or in the amounts of alimony or child support that you may receive. Some of the more common ways that a dishonest spouse may hide assets during a divorce include, but are not limited to:
- Purchasing items during the year of or prior to the divorce that could be overlooked or under-valued. Examples of this behavior may be an antique piece of furniture or an expensive area rug that has suddenly appeared in your spouse’s office. One should also look to see if any significant changes or additions have been made to your spouse’s coin/stamp/art/tool or other collections;
- Overpayment of federal or state taxes or over payment to creditors. If there is an overpayment, your spouse may obtain a refund of the overage after the divorce has been concluded;
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- Under reporting cash income. This includes income (often cash), which is unreported on tax returns and financial statements. In such circumstances, the cost for funding your life style would exceed your reported income. Consequently, you must document your cash expenditures for your lifestyle;
- Stashing away money in a safety deposit box or elsewhere. Your spouse may be going to a grocery store and picking up an extra $40-60 in cash by using the debit card. The account statement will only indicate or imply that he was buying groceries. These small withdraws may only be a modest amount of money if only done a few times. However, these modest transactions add up if this tactic is repeated over a longer period of time. In addition, your financially unfaithful spouse may just take a larger chunk of money from a savings account and stow it in a safety deposit box or another account that is unknown by you;
- Creating phony or false debt. Your spouse may create false debt by conspiring with friends or his family members to establish phony loans or expenses with the understanding that the relative or friend will repay to your spouse the “loan payments”, after the divorce has been concluded; and
- If your spouse owns his or her own business, than beware of salary paid to a non-existent employee. Those checks can be voided by your spouse once the divorce has been concluded. Also, beware of business expenses paid for a girlfriend or boyfriend who has now been labeled as an “employee”. These expenses may be labeled as cash or salary, but are really used for spending money for gifts, travel, jewelry, or other living expenses for the girlfriend or boyfriend.
The best way to attempt to flush out this type of financial infidelity is to retain an experienced attorney and an experienced accountant during your divorce. If you suspect that you spouse is attempting to play this type of financial “hide-and-seek” with you or suspect that your spouse may do so in the event you commence a divorce, then please contact The Law Firm of Charles D. Jamieson, P.A. online or call 561-478-0312 to schedule a consultation.