With divorce looming on the horizon, it’s important to get your proverbial ducks in a row. Particularly when it comes to finances.
During the process, both you and your soon-to-be-ex need to provide records of income, assets, debts, and all the rest. These will then be divided according to the law based on various factors.
You may be tempted to try to hide some of your valuables. That, however, has serious consequences if you’re found out, including fines, contempt charges, and even jail time.
But what if your ex tries hiding assets? It’s all too common for people to squirrel treasures away when divorce is imminent. If you know to look for certain red flags, it can help protect your rights and your financial future.
Signs They May Be Hiding Assets During Divorce
This is not an exhaustive list by any means, but here are some common signs your ex might be hiding assets. These don’t automatically mean that’s the case, but if you see one or more of these, it might be worth closer examination.
Being a business owner isn’t in and of itself a warning sign of hidden assets. That said, if your ex owns a business, it does provide creative opportunities to conceal money.
Be wary of drastic changes in reported income and unexpected increases in operating costs.
Purposely running a business into the ground may signal something is amiss. Not letting you look at financial records for the business may also tip you off.
If either of you owns a business, it makes divorce that much more complicated. There are many specific concerns and potential consequences you face in that situation. It may even impact business partners. In these situations, it’s likely in your best interest to talk to a professional with experience in these cases.
Related Reading: High Asset Divorce: 6 Mistakes That Can Cost You
2. Income/Lifestyle Discrepancy
If your ex lives large, but claims to have no money, or reports an income below the poverty line, that may indicate something is awry with the financial disclosure.
If your ex buys a new car or vacations in Cabo, but claims there’s no money, keep an eye open.
Additionally, changes in how much or how often your spouse contributes to family expenses can be a warning sign of hiding assets.
Related Reading: How Does Divorce Mediation Work?
3. Changes in Deposit/Withdrawal Activity
If you notice sudden changes in banking activity, it might be worth taking a closer look. Patterns shifting after years of consistency and predictability may indicate your ex has something to hide.
It isn’t uncommon for spouses to make cash withdrawal or to start diverting money into new accounts when a divorce is inevitable.
Cash transactions are more difficult to track. Thanks to this, it’s an attractive avenue for people trying to stash assets out of view. Once cash is removed from an account, it can be tucked away in any number of places until the divorce is final.
Related Reading: Rebuilding Your Finances After Divorce
4. Overly Assertive About Financial Documents
If your ex insists you sign important financial documents right away, it may signify an attempt to hide assets. Pressuring you to act quickly may be a strategy to get you to overlook something significant.
This can encompass everything from wanting to be added to property via title or asking you to sign quit claims that release interest in titles or accounts.
Don’t give in to the pressure and don’t sign anything just because it’s easier. Take the time to read all documents. If you don’t understand them, find someone who does, the more experienced the better. This is important whether you think your ex is hiding assets or not. Either way, your financial future hangs in the balance, make sure to do things right.
Related Reading: The Cost of Divorce in Washington
5. Secretive About Finances
Is your ex being secretive about finances or getting cagey when you ask about bills, expenses, income, or spending? Sure, some people don’t like to talk about money, but these may also be red flags that someone is hiding assets.
You can help yourself by paying close attention.
Keep an eye on credit card statements and monitor credit reports before, during, and after divorce. Spouses commonly max out lines of credit or open new accounts.
People often accumulate clothes, jewelry, and other expensive items on joint accounts. Depending on the situation, this debt may be divided in the divorce and you may wind up on the hook.
Related Reading: How to Split Debt in Divorce
6. Sudden Change in Business Profitability
Again, businesses offer a variety of ways for people to try to hide assets during a divorce. If a business has been profitable but takes a drastic, sudden downturn, it may be a red flag.
Keep an eye on reports of record losses or skyrocketing costs. This may require a closer look.
Overstating expenses and understating income are two methods of making a business appear less profitable, and thus less valuable than it is in reality.
Related Reading: How Is A Business Divided in A Divorce? Can You Protect It?
Giving gifts of cash or assets to family members is a common way people try to hide assets in a divorce. If your spouse starts handing out money or property to friends or family before filing for divorce, those assets may be out of reach when it comes to the division of property.
This is especially challenging when it comes to overseas relatives. Money held in offshore accounts can be particularly difficult to locate and even harder to recover. If you suspect that your spouse is trying to hide assets in an offshore account, you may need to hire a detective who specializes in financial fraud.
Related Reading: Is Inheritance Considered Separate Property in Divorce?
8. Unfamiliar Financial Institutions
Divorce or not, it’s important to keep an eye on bank statements, credit card bills, and other financial documents. That’s just basic money management.
If you start seeing documents from financial institutions where you don’t have accounts, take note. This may indicate your spouse opened new accounts and is trying to move funds from joint accounts to one you can’t access.
Finances are complex under normal circumstances. As with most things, divorce only further complicates the matter.
If you suspect your spouse is hiding assets, it’s vital to consult a professional. An experienced divorce attorney knows what to look for and how to handle these situations and can help secure your financial well being in the future.
Related Reading: Moving Out During Divorce: What to Know *Before* You Go
QUESTIONS FROM THE RADIO
One of our founding partners, Rick Jones, has a regular guest spot on the Danny Bonaduce and Sarah Morning Show. On the air, he takes family law questions from listeners, including one related to this topic.