How Do People Hide Assets Before Or During Divorce?
Asset hiding may be unethical and illegal, but it’s also incredibly common; according to a 2014 Harris Poll, three of every ten adults with shared assets have hidden them from their partner. The likelihood of hidden assets increases substantially as relationships move toward divorce. Keep an eye out for these common strategies:
Transferring Assets to Separate Accounts
Simple, yet effective, many spouses fool their partners by opening separate accounts, often while still married. Some begin to transfer assets to secret accounts months, even years before they broach the topic of divorce.
Transferring Assets to Friends or Family Members
Your spouse’s loved ones may be well aware of the impending divorce—they may even agree to hide assets until after the split. Asset transfer may occur systematically over long periods of time. Venmo and other services make it easy to shift funds to friends while escaping a spouse’s detection.
Overpaying the IRS
Few people purposefully give the IRS more than it’s due, but divorce changes priorities. Those who overpay the IRS prior to dissolution can expect a substantial refund check, which they keep all to themselves. This tactic works especially well for independent contractors and others required to make quarterly payments.
Delay Promotions, Raises and Commission Payments
Your spouse impressed management and earned a well-deserved raise or promotion. You may never learn of this development, however; employees who enjoy close relationships with their boss may request a brief delay, finally taking advantage of a higher salary or impressive commission check following the divorce’s finalization.
Delaying Payments From Clients
Does your spouse have a ton of money sitting in Accounts Receivable, waiting to be collected? Is he blaming clients for the fact that there’s almost no money in his business account? The late payments could be purposeful; as a sole proprietor or small business owner, your soon-to-be ex may encourage clients to delay payment until after the divorce.
Purchasing Commonly Undervalued Items
Did your spouse recently add on to a stamp or coin collection? Perhaps you’ve noticed new antiques or paintings around the house. Your partner’s goal may be to hide assets in plain sight, hoping you’ll underestimate their true value.
Given the vast array of tactics spouses can turn to when hiding assets, it’s imperative you work with a skilled family law attorney who employs a thorough discovery process. Let your attorney know of suspicious behavior, including the approaches outlined above.