If you are divorcing, you have enough going on, and the last thing you need to worry about is whether your spouse is hiding assets in the process. The fact is that the emotional upheaval of a divorce can cause otherwise reasonable people to behave unreasonably. If your divorce is especially contentious and/or your finances are complicated, hiding assets becomes more likely. If your spouse is hiding assets, however, there are probably signs to point you in that direction. Not every divorcing spouse in an acrimonious divorce will stoop to the level of hiding assets, but it is important to recognize that it does happen.
Your Household’s Finances
In many household’s, one spouse is more involved with the financials than the other. When you are going through a divorce, however, this can make things more difficult. If you are less involved in your family’s finances, it is time to take action. A major component of your divorce is the division of marital property, and to divide it in a manner that is just and right (Texas’s standard), you need to understand what you are working with. If you are facing a divorce, you need to become very familiar with your family’s financials.
The best path forward is to gather tax returns and supporting financial documents and acquaint yourself with the numbers. Your taxes should accurately reflect your household’s combined income. In your investigations, pay close attention to anything that might reflect suspicious activity, including:
- Schedule B, which delineates all interest and dividends received during the year
- Schedule D, which delineates all capital gains and losses (these refer to the selling of assets and can mean that your spouse is getting creative with your marital property)
- Form 1099-R, which delineates any distributions made from retirement accounts
If you see unexplained activity in any of these categories (in recent taxes), it could mean that your spouse is hiding assets. It is important to note, however, that if asset-hiding is more current it will not yet be reflected in your taxes.
If yours is a high-asset divorce or is complicated by something like business ownership, it provides your spouse with more opportunities to obfuscate on the financials. In such cases, it is in your best interest to work with a forensic accountant to obtain an accurate measure of your marital assets.
If your spouse is hiding assets, there are several signs that may be indicative, including:
- Suddenly changing spending habits
- Keeping you in the dark about your family finances
- Putting you on a budget
- Moving money around frequently
If you have a sense that your divorcing spouse may be up to no good regarding your marital assets, there is probably a good reason for it.