If you and your spouse are in the midst of a divorce, but you were not the one who handled the finances during your marriage, you could find yourself at a real disadvantage if your soon-to-be ex-wife or -husband attempts to hide some of the marital assets.
The spouse who lacks financial savvy is sometimes taken advantage of by a deceptive wife or husband when it comes to the property settlement portion of the divorce. Below are some tricks of which divorcing spouses should be aware.
- Setting up separate accounts to move assets. This is probably the most common method used by spouses attempting to fraudulently transfer marital assets into their names only.
- Switching assets into another person's name who is colluding with the spouse attempting to hide the assets. This could be a sibling or parent of the spouse, or a friend or business partner. Often the transfers are made systematically over a period of months and may be disguised to appear as some type of business transaction. However, once the divorce is finalized, the assets will get funneled right back to the deceptive spouse.
- Making multiple cash withdrawals using debit cards. Spouses might deplete marital bank accounts through strategic withdrawals using the cash-back feature at the register when making purchases of groceries or household goods.
- Overpaying taxes to the Internal Revenue Service. Spouses shield assets this way and still retain deniability if they get caught by pretending it was just a mistake.
- Conveniently "forgetting" about stock options or retirement accounts through their employers. Since statements aren't sent out monthly or even quarterly for most of these accounts, they could slip through the cracks unless the other spouse is vigilant.
- Delaying raises, bonuses or salary-boosting promotions until the divorce is finalized. Spouses can arrange for these income-altering employment changes to take place after the divorce judgment is signed.
- Delaying payment of commissions. Those in sales who work on commission could ask their employers to postpone paying out a hefty commission allegedly for "tax purposes."
Small business owners can have even more dirty tricks up their sleeves
Those who own their own businesses have even wider latitude to play fast and loose with marital assets. Some possible ways to deny paying the rightful settlement to a spouse could include listing false business expenses, waiting to invoice vendors or clients or eating up a business's profits with expensive but unnecessary purchases.
If you suspect that your spouse may be involved in hiding or siphoning off marital assets, you should immediately let your family law attorney know so that he or she can recommend a forensic auditor to scrutinize the accounts.