Divorce, Deception and Hidden Asset Discovery

Despite irreconcilable differences in a marriage, most people enter the divorce process believing their soon to be ex-spouse is a generally honest person. However, this is not always the situation. The fact is there are those individuals that knowing a divorce is imminent or in their future, will conjure up ways to conceal assets. Regardless, even if you have no reason to suspect your former partner is a liar, there is still good cause to be curious and concerned about your family’s finances heading into a divorce.

Once a divorce begins, some parties will do whatever it takes to conceal and hold on to what they believe is their money. Moreover, some will have even created secret accounts or have performed other devious financial actions during the course of the entire marriage. Discovering these hidden assets, during a divorce will enable you to receive an equitable divorce settlement.

You should never rely entirely on your spouse’s financial affidavit. The good news is an experienced divorce attorney has seen many of these hiding asset schemes before and has many tools at their disposal such as the right to issue subpoenas (court orders to produce records or testimony) to assist in uncovering hidden assets. An experienced divorce attorney can also assist a client to retain outside experts including a forensic accountant or a computer forensic or other investigators who will do whatever they can in conjunction with the divorce attorney to uncover hidden assets during the discovery process. An experienced divorce attorney who is also trained in finance is able to review bank statements and investment account statements and credit card statements to identify suspect transactions.

In today’s world, many couples have very complicated and difficult to understand financial portfolios that may include retirement plans, stocks, stock options, stock awards, investment accounts, vacation properties, trusts, digital currency i.e. bitcoin and more. Not every person understands all these financial vehicles. The first step when facing divorce is to hire an experienced divorce attorney who can help you identify what your financial portfolio is and who can assist you in assembling and hiring a team of experts if that is cost effective and recommended depending on the size and makeup of your unique financial portfolio.

For an experienced divorce attorney trained in finance, deception is often easily discoverable. The hiding places, many times, are predictable. These are some of the more common schemes:

1. Family and Friends – Your ex-spouse may conspire with family or good friends. This is often done by making payments for imaginary items or services, then getting reimbursed after the divorce. It may also be a pattern of gifting money to family members in an effort to deplete the marital estate. An experienced attorney will scrutinize payments made by both personal and business accounts.

2. Fake Employees – Having a fake employee on the payroll is a common technique for concealing the money generated by a business. While your ex-spouse may think they are being slick, an audit of their payroll will uncover the truth.

3. Unreported Income – Does your ex-spouse work in a cash business? Some people believe they can keep their true income hidden by excluding revenue from their financial statements. However, the lifestyle of an individual and lifestyle costs often reveal the truth.

4. Delayed Compensation – Your ex-spouse’s stock options, raises, and bonuses are all included in a divorce. However, if your ex-spouse has a friendly boss, they can conspire to delay promotions or payments of bonuses.

5. Custodial Accounts – One of the most devious methods of hiding money is setting up a custodial account in the name of one of his or her own children. While this is hiding assets from the court, they are basically gifting the assets to their child. This can mean, if they eventually take the money back, they are stealing.

If you’re considering divorce and have concerns about the possibility of hidden assets, we encourage you to call our office and schedule an appointment.