During a divorce, especially one dealing with a large net worth, spouses can be on the worst behavior when it comes to money. According to the National Endowment for Financial Education, 58% of spouses hide assets from their partners. If you suspect your spouse is part of the 58% hiding money in the midst of or prior to your divorce, you’re not without recourses. In this blog, we’ll talk about where assets are commonly hidden, how you can find them, how you can prevent these situations, and what you can do after the fact.
Where Do Spouses Commonly Hide Assets?
What follows are a few common ways spouses will try to hide money:
- With Banking: by transferring assets into a separate account or shell company.
- Giving To Friends and Family: when you give an asset to either, it’s no longer part of the marital estate.
- Through Taxes: overpaying the IRS can delay payments until after the divorce.
- With Cash: some spouses start withdrawing cash from shared or personal accounts and hiding it.
- At Work: by turning down promotions and deferring bonuses, commissions, or raises until after a divorce is finalized. If the spouse owns their own business, they can hide assets through not billing clients on time, creating fake expenses, or adding family and friends to payroll and paying them for fake consulting.
- Through Purchases: a spouse can begin spending money on easily hid material assets like art or jewelry.
- In Cryptocurrency: digital currency can be difficult to trace, if you don’t have the right experts.
How Can I Find Hidden Assets?
During a divorce, discovery is your best bet for tracking assets. In the discovery phase, you have the right to ask for anything relevant to your case. This means you have access to a great deal of private information that could normally be off-limits. You can request various documents such as contracts, financial records, and business documents that can help you find various assets. If you feel your spouse is still hiding documents and items from you in the midst of the case, you can also ask for a court order compelling them to produce the requested items.
In addition to an experienced attorney, there are other experts who can help you find hidden assets. Many people hire forensic accountants and private investigators to work with their attorneys. Forensic accountants are especially helpful in translating complicated financial documents and contracts, enabling you to find out if and where assets are being hidden.
Technology can also be an asset. Some spouses will plead financial dire straits, but their social media posts with lavish vacations and new purchases will say otherwise. Your spouse may also have neglected to mention a new business or position to you, but told their professional network on LinkedIn. Keep a file of these indiscretions for later use.
How Can I Prevent Hiding Assets?
It’s easier to prevent hidden assets than to track them down. This requires being mindful of your finances. Apps like Mint can help you monitor all your financial accounts in one place, so you’ll be alerted to deposits, unusual spending, or large withdrawals. Keep records of withdrawals, whether to help prove they were legitimate on your behalf or done fraudulently by your spouse. Also, Don’t let one spouse have all the access to various accounts and savings. Make sure you have the proper passwords, logins, and relevant documents. Wherever possible, maintain a paper trail.
What Can I Do If Hidden Assets Are Discovered After the Divorce?
Your divorce is complete, but you have reason to believe your spouse hid assets during the process. If no statute of limitations applies, you can file a motion with the court where your divorce was finalized to reopen the case. Since California is a community property state you are entitled to half that asset or its value. By reopening the case, you may be able to change the divorce agreement to take newly discovered assets into account. Your spouse may also be punished for their deceit, as was the case of Denise and Thomas Rossi.
Denise Rossi won a 1.3 million CA lotto prize and kept it secret from her husband, who she divorced shortly after winning. Two years after the divorce, her husband discovered her deceit through a piece of mail sent to him. When the case was reopened, the family court judge awarded Thomas, not only his fair share but the entire 1.3 million sum. This included what she had already spent. This is an effective cautionary tale for any other Californian who considers doing the same as Denise.
How We Can Help
We have experience in divorces where finances are difficult to track and contested. Let us help you with our resources and expertise. To begin the process of getting you what you’re entitled to, or if you have further questions contact us at 714.456.9118 or send us an email at email@example.com.