Divorce can be a costly process, especially if it’s a hotly contested dispute. One of the most common issues people experience during divorce is dividing marital or community assets.
Unfortunately, there are many cases where one spouse attempt to conceal assets from the other party either to keep more themselves or out of revenge. Keep in mind, it is against the law to behave any party to act in this manner. Not only does being dishonest about your finances—especially under oath—lead to stiff criminal penalties, but also all hidden assets will go to the other spouse.
Here are several ways a spouse can hide assets during a divorce:
- Your spouse controls all of the finances – If your spouse controls all of the joint accounts and has all of the account’s passwords but prevents you from looking at bank and/or credit card statements, this type of behavior is often a sign of hiding assets. You have the right to know what’s going on with your finances.
- Your spouse opened a separate account – If you notice any bank and credit card statements from an unfamiliar account or automatic payments made from or to an account you don’t recognize, your spouse could’ve slowly drained your joint account into a new account.
- Your spouse overpays credit card debts – Let’s say if a credit card has a balance of $100 and your spouse made a payment of $1000, $900-worth of credit is created. This money is as good as real cash.
- Your spouse underreports income – Whether your spouse runs his/her own business or receives payment in cash, he/she can underreport their earnings with ease. However, this can be difficult for W-2 employees to accomplish.
- Your spouse is making lavish purchases – From cars to works of art, if your spouse is making expensive purchases, he/she could be converting marital funds into tangible assets and underreport their true value during a divorce.
- Your spouse is gifting to friends and family – Giving large gifts to loved ones during divorce is another common way to hide assets. Family members and friends could keep these assets and return them once the divorce is over.
- Your spouse has a history of lying – If your spouse continuously lies to you throughout your relationship, he/she will most likely keep lying during the divorce proceedings.
If you are interested in filing for divorce, you must remain vigilant with your financial and business information when the proceedings occur. Never assume your spouse is honest about financial affairs.