When you and your spouse have a high net worth, it raises the stakes for your divorce. Unfortunately, a pressurized situation like that brings out the worst in some people, and your spouse might try to hide assets.
Hiding assets prevents equitable distribution between you and your soon-to-be ex-spouse. Not only is this against the law, but it is also unethical. Nevertheless, some people perceive the reward to be worth the risk.
Why do people attempt to hide assets?
According to the Good Men Project, the goal of hiding assets during a divorce is to misrepresent one’s financial situation in the interest of keeping more property or paying less in support. Sometimes hiding assets involves underreporting of income or revenue or overstating of debts or expenses. Other times, it involves not declaring assets at all.
What tactics might your spouse use?
The tactics used to hide assets are usually predictable, although your spouse may come up with creative variations on a theme. Generally, you may notice your spouse becoming more secretive and making unusual purchases. To alleviate suspicion, he or she may complain frequently about not having enough money or owing too much debt.
Your spouse may discreetly transfer money or property to family and friends. He or she may overpay taxes, expecting a refund, or underreport income. Either can get your spouse in trouble with the Internal Revenue Service if discovered.
What can you do about your spouse hiding assets?
You should make your own financial records as complete and accurate as possible. Gather as much information as you can find about income and expenses for both yourself and your spouse. You may need professional help from a forensic accountant to uncover assets that your spouse has successfully hidden.