If you’re heading into a high-asset divorce, you need to know that your spouse may try to hide money and other assets during this process. They are legally required to provide full disclosure when it comes to financial assets, but not everyone does so in every case.
The first thing you should do is to understand how they may try to hide assets. This allows you to look for indicators and red flags. A few common ways include:
- Paying creditors or the IRS more money than is owed. This generates a refund check, which they may simply wait to cash until after the divorce.
- Lying on their taxes. This is illegal as well, but people do it to make their income look lower than it is.
- Giving money to someone that they trust and arranging to get the “gift” back after the divorce.
- Giving someone a loan that they don’t actually need, with the same goal as the above.
- Taking small amounts of money that go unnoticed and setting them aside, perhaps in a hidden bank account or a safe deposit box.
- Buying something that is worth far more than it appears or that they neglect to tell you that they bought in the first place. After the divorce, they can then sell the asset again in order to get most of their money back.
While a spouse may honestly forget about some assets, omitting or undervaluing property intentionally may be fraudulent. This is why you need to know as much as you can about your financial situation and your legal options during a divorce.