Not only is hiding assets from someone you previously loved immoral, but it is also highly illegal. Even so, discovering hidden assets is something our divorce group, specifically our high-asset divorce group, does regularly. Here are just some of the ways in which we have discovered individuals attempting to hide assets from their spouses. This list is meant to aid spouses from being outed in divorce, not aid the illegal hiding of such assets.
Attempts to Hide Assets in a Divorce
1. Transfer assets to a separate account. This involves taking money from a joint bank and brokerage accounts and transferring it to an account only in one spouses name.
2. Transfer assets to a friend. In a joint bank or brokerage account, both parties have full control over the assets.
Some people systematically transfer cash and/or investments to an account their friend holds, and then once the divorce is finalized, that friend transfers it back to them.
3. Overpay the Internal Revenue Service. Some individuals who know they are going to file for divorce next year instruct the IRS to use this year’s refund for next year’s tax. Once the divorce is final, they receive a large overpayment from IRS that they use against future tax.
4. Take cash withdrawals on debit cards. Some people use debit cards for every day purchases. When you use a debit card, you are always asked if you would like cash back. In this instance, the individuals continually answer yes to that question and withdraw small sums of money multiple times over a long period of time. Here, the actions are hidden because the total charge shows as groceries, clothes, movies, etc.
5. Turn down promotions and raises. Some people tell their boss to delay any promotions (if one is coming) and set any raises/bonuses aside until after it was finalized.
6. Accrue commissions. After closing deals at work, some spouses request that their commission is delayed for tax purposes, i.e. hiding it from their spouse in divorce.
If your spouse owns their own business, they could also be using some of the below techniques to hide income from you:
8. Not invoice clients. It wouldn’t be difficult to delay invoicing clients until after the divorce. Although accounts receivables would be accrued assets, this is easier to hide than cold hard cash.
9. Create fake expenses. Creating fake expenses, paying fake vendors, and adding family or friends to the payroll is a common way for individuals to hide money through their business.
10. Go on a shopping spree. This is self explanatory.
Credit: Asset hiding techniques to divorcenet.com
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