Going through a divorce can be an emotional time in a person’s life. On top of dealing with a failed marriage, spouses must sort through their wealth and belongings as well as face the possibility of a child custody dispute.
In some cases, a higher earning spouse may be ordered to pay alimony to the lower earner. Sometimes, though, the more financially-equipped spouse attempts to hide assets from the other spouse and the judge. To do this, the breadwinner may do the following:
- Change the delivery location of bank and financial statements
- Intentionally overpay creditors or the IRS with the intent of getting that money back after the divorce
- Take a sudden salary cut
- Hire new employees without adding new clients to undervalue an owned business
- Act defensive or peculiarly secretive
Hiding income or debt from a spouse during a divorce is not only unethical, it is also illegal. Punishments can be severe, but only if the perpetrator is caught. Without legal help, it can be difficult to spot and even harder to prove.
A lifestyle analysis can be useful in pinpointing the wealthier spouse’s financial infidelities. The report is used to take a transparent look into a couple’s standard of living during the marriage to determine if the reported income and assets against liabilities reported currently are enough to fund their lifestyle. If there are any glaring differences between marital living expenses and all known sources of income, financial cheating could exist.
Divorce lawyers say other red flags include a significant purchase of items that could be overlooked, like stamps for a collection, and withdrawing lots of cash or transferring assets to a friend or relative.
For these reasons, it is important for the less wealthy spouse to be consistently involved in financial decisions from “I do” — even in happy marriages. At the very least, spouses should document any noticeable changes in their partner. Utilizing these benchmarks and having a strong legal team will go a long way in lessening the stress of divorce and ensuring financial stability for the single life.
If you suspect your spouse is hiding assets in divorce, or if you are considering divorce, contact a knowledgeable divorce attorney in your area.