One of the most contentious aspects of a divorce can be splitting assets. The fear of financial loss during a divorce sometimes leads to a spouse taking drastic measures to “win” the divorce. Some unscrupulous spouses will stop at nothing when it comes to manipulating bank accounts, checkbooks, ledgers, and other indicators of actual net worth.
If you’ve been married to someone who has a history of playing loose with the rules, then pay attention to these areas where spouses can hide assets during a divorce:
- It is giving the assets to a trusted friend or family member. This is among the most blatant ways that money or assets can be concealed. Watch for falsified financial transactions such as a mysterious loan that must be “repaid” to a cousin; random loans to a friend or family member that becomes suddenly uncollectable; accidental high-ticket purchases from friends or relatives; or random expensive items that accidentally “disappear” under weird circumstances with no insurance claim made.
- They are overpaying creditors. Watch for overpayments to creditors or other entities where the payments create a credit balance that can be cashed in after the divorce. One area often exploited is an overpayment to the IRS, making a tax credit that can be used in the future. Payments like this do not appear in the checking or savings accounts and are often not inventoried for division during the divorce.
- They are deferring or delaying a raise or promotion at work. Pay attention to signs that your spouse might be waiting for actual bonus money or accumulating raises, stock options, or other employment benefits. In many instances, these deferments would create divisible community assets! Also: if your spouse owns a small business, there are many opportunities to “relocate” assets that should be divisible. A financial expert is often required to audit closely-held companies to determine if there are assets that belong to the community.
- Buying equipment for hobbies. During your marriage, you probably each had your hobbies and interests. Pay attention to the actual amounts spent in support of these activities – there could be hidden assets to be awarded in the divorce settlement.
- It was changing mailing addresses on the bank and financial statements. If you notice that the bank isn’t mailing the monthly checks like it used to, your spouse may be attempting to conceal the withdrawal of money from certain accounts.
Conclusion
It can be surprising the lengths spouses will go to conceal assets. The good thing is that there are ways of finding out if your spouse has resorted to shady or illegal practices. In a contested divorce, formal discovery can dig up records and find assets. A good forensic accountant might be needed to find the money trail in some cases. Make sure you discuss this with your attorney during the early stages of your divorce! Texas divorce law provides for equitable distribution of marital property. This means that all marital property, if divided by a judge in court, will be divided based on what that judge deems is a “just and right” division of property. If your spouse has hidden assets to offset that just and right division, you might be able to persuade the court to award you a higher percentage of the marital property!
Here’s a bonus tip from Houston divorce attorney Robert Von Dohlen:
If you have any reasons to suspect that your spouse has hidden assets that will magically reappear after the divorce, make sure your attorney addresses this in the final decree of divorce. It is possible to include language that awards such assets to the innocent spouse!
