Uncovering Hidden Assets And Income In Your Divorce
When a couple divorces, each party is required to provide the other spouse with a complete disclosure of his or her assets and liabilities. This is because property that is acquired during a marriage is subject to an equitable, if not equal, split.
Unfortunately, a spouse may try to hide assets in an attempt to avoid dividing them. A recent study by the U.K. accounting firm Grand Thornton, revealed that in 20 percent of divorces at least one spouse tries to conceal assets or income from the other. About 88 percent of the time, the spouse concealing the assets is the husband.
Catching a deceitful spouse
If you suspect that your spouse is hiding assets, follow these tips:
- Make copies of your old tax returns. If you don’t have access to your tax returns, contact the IRS. They will provide you with past returns for a charge. Check Schedule B on the returns because this schedule lists the names of all mutual funds, brokerage companies, banks and other sources of dividends and interest. Schedule B also requires a person to reveal any banks and financial accounts in foreign countries or foreign trust transactions.
- Make copies of bank statements, credit card statements, retirement account statements, and any other financial information that you can get your hands on. These statements may reveal suspicious transfers or purchases.
- Track your spouse’s ATM withdrawals. You can usually get a record of ATM activity from your bank. When people try and hide money, they usually use cash and an increase in ATM activity may be a red flag.
- Obtain a copy of your credit report and look for unfamiliar financial activity on your report.
- Contact your spouse’s employer’s human resources department to determine payment records. Divorcing spouses may try to defer payment of salary, commission or bonuses in an attempt to minimize their income during the divorce.
- Look for accounts in your children’s names. One way your spouse may try to hide assets is to hide them in a custodial account in the children’s names.
- Check your spouse’s tax withholding status. Your spouse may attempt to over withhold income now, so that he or she can receive a big tax reimbursement post-divorce.
If you suspect that your spouse is concealing assets or income, contact an experienced divorce attorney. Your attorney will help you decide whether or not a financial investigator should be hired to examine any suspicious financial activity.