Spouses can get quite creative when it comes to stashing money away that would otherwise be a marital asset. Typical examples include opening offshore bank accounts, using hidden retirement accounts or deferring compensation. One CPA even tried to overpay the IRS with the idea that he would later file for a refund.
It is generally recommended that Texans work with a knowledgeable Board-certified Family Law expert attorney in Collin County, Dallas County, Denton County or elsewhere throughout Texas when filing for divorce, even in cases where the split is amicable. While these attorneys have experience recognizing different strategies used to hide money in a divorce, the most common strategies for recognizing there is a problem include:
Look at tax returns: Form W-2 includes how much a spouse earns, but it also indicates how much is saved in workplace plans as well as withholdings.
Look at paystubs: This will indicate how much is deferred to health savings accounts or retirement accounts.
Look for other businesses: Some entrepreneurs start new businesses all the time for different projects and sometimes in different states, so it is wise to search for other corporate and business entities in your home state as well as others they visit.
Look for hidden accounts, including offshore accounts and casino accounts.
Look for deferred distributions and/or retained earnings in sole proprietorships, partnerships, and control corporations.
Other behaviors to watch for
These can include:
- A change in their spending habits
- A spouse proposes you use a cash allowance or budget in an effort keep you from seeing bills
- Transferring a lot of money between business, personal and brokerage accounts
Paying attention is a good start
It never hurts to understand how finances work, even when you are not planning a divorce. Nevertheless, there are a surprisingly large percentage of couples where one spouse is in charge of the purse strings. Since tax season is a natural time for seeing financial information, paying attention and checking the spouse’s numbers are a good start. If there are red flags, it may be wise to speak with an experienced and financially savvy Board-certified Family Law expert to determine if there is an issue and what a divorce could look like.