Is Your Ex or Soon-to-Be-Ex Trying to Hide Assets?

We’ve seen many Bucks County divorces in which deception is a partial cause of the breakdown of the marriage. This tendency to be dishonest often increases when it comes time to negotiate financial settlements and spousal or child support. Sometimes a spouse will try to hide assets or income before settlement in order to limit his or her loss. This deception may continue after the divorce is finalized, for instance, hiding significant pay raises or other financial success, in order to avoid increases in support. What can you do about this? Fortunately, plenty. But it takes work. 

Ways to hide assets

There are many creative ways to hide assets, income, or gifts, both before and after a divorce. Below is a partial list, including some that we’ve seen in our practice:

• Spending on extravagant items, trips, etc. 
• Hiding cash in a safe deposit box or at home, work, or other location.
• Getting paid under the table.
• Delaying a major business deal, sale, public offering, or bonus until after settlement.
• Transferring assets, giving substantial gifts, or repaying a phony loan to someone with the expectation they’ll give the money back after the settlement. A complicit or naïve family member is sometimes willing to do this.
• Creating a corporation in which to invest money.
• Overpaying credit cards, bills, PayPal, or equivalent. Your ex can call after settlement and get a check, or can just use the balance to buy things.
• Overpaying taxes. Tax refunds can take time and may come in after settlement.
• Purchasing prepaid credit cards and gift cards
• Receiving a payment or gift but not cashing the check right away, so it’s not recorded.
•  Creating fake expenses or a fake employee to “pay,” but stashing the cash.
• Making a down payment on significant assets, like art, a boat, a car, or jewelry. The item does not yet belong to your spouse or ex, but the money is gone and not easy to find.

How to find hidden assets

If you suspect your ex or soon-to-be-ex is hiding assets, do NOT confront him or her. That will make your job harder. And don’t try to do a full financial audit on your spouse or ex yourself. You will need help from professionals who know how to do it legally and thoroughly. In some cases, you may need a court order. Experts may include a forensic accountant or a private investigator.

A forensic accountant will look at income tax returns for evidence of trusts, real estate, partnerships, or other previously unknown financial activities; bank accounts and credit card statements for excessive spending beyond stated income; credit bureau records and business records for unknown or fraudulent activity, and more. 

A private investigator can follow your ex, noting activities, expenditures, new cars, fancy restaurants, and other evidence suggesting more income than is reported.

If you have evidence that strongly suggests hidden assets and you have not yet finalized your divorce, your lawyer can use this as powerful leverage in your settlement. If your divorce is settled, you can go before a judge with your lawyer and your evidence; the court may rule that the information shows “inferred income” and increase your ex’s support obligations.

We’ve seen our share of financial shenanigans in divorces, but we’re committed to making sure our clients get the fairest settlements with the least amount of stress. Contact us here at the Law Offices and Mediation Services of Elissa A. Goldberg to help you with your divorce, child custody, or mediation needs.