Is My Spouse is Concealing Assets?

Financial infidelity is regrettably common in marriages, especially when one partner is not involved with paying bills, managing cash flow, or working with the financial advisor. When the marriage ends in divorce, the spouse who handled the finances often tries to hide cash and investments and falsify debts and expenses.

If you have always left money matters to your spouse and are now either considering divorce or in the middle of one, financial infidelity can affect what assets you receive and how much you are awarded in alimony and child support. Concealing money, property, and liabilities is illegal, but that doesn’t always act as a deterrent.

Here are nine signs of your spouse possibly concealing assets from you.

1. They transfer funds out of one account, but you can’t see where the funds “landed.” Money can be taken from your joint brokerage and bank accounts and put in your spouse’s private account. When your attorney does a “Due Diligence” search on assets as part of your divorce process, combing through records looking for such one-sided transactions is a way they or a Forensic Accountant can help spot issues.
2. They use the “cash back” feature when buying something with debit. It’s easy to purchase something like groceries and ask for cash back. $40 here and $80 there can add up over time. The total charge shows as groceries or whatever legitimate expense the card was used for, so the surplus money is nearly impossible to detect. To spot this, track your debit expenses closely and look for any trends that seem unusual compared to past purchases. If groceries used to cost $400 a month and all of a sudden they jump to $600 a month, with no real perceived difference in quantity or quality of purchases, this could be a sign. This type of deceit can be hard to discover and prove.
3. They overpay the IRS. A spouse can intentionally overpay the IRS, and then request the IRS to apply it toward next year’s taxes. By then, the divorce is likely over, and the spouse will keep the oversized refund. As with the previous discussions of Due Diligence, look for such “errors,” in taxes including not only overpayment, but trying to conceal a refund, or straight out deceit on a tax return in their favor.
4. They transfer assets to a friend/confidant. Your spouse can easily transfer investments or cash from your joint bank or brokerage account into that of a friend or family member. After the divorce is finalized, he or she can then transfer the assets back into an account your spouse holds. Again use “Due Diligence” and look for one-side transactions.
5. They use cash or have a secret PayPal or Apple Pay account. In today’s world most people do not carry around large sums of cash. However, when a party is trying to hide money they look for a way to move money around with no paper trail. Cash is one of the few ways left to do this. PayPal and Apple Pay are methods, not as private as cash, but easy to implement without notice to a spouse.
6. They have high-level access to business accounts. One of the most common ways a spouse hides assets is through using a business account where he or she has access. The business can be self-employment, a business the spouse runs, or a business run by the family. A forensic evaluation is often very helpful in uncovering these missing or hidden assets.
7. There is a Family Trust. A not uncommon method is to take money from employment, give it to their family, and then the family returns the money into a trust account, as a “gift”. This makes the money non-marital and not subject to division. This tactic can be applied in a number of ways. Look for unexplained changes in the standard deposit amounts.
8. There is an international component. Wire transfers and other cash-wiring services make it possible to transfer large sums of money out of the country. Watch for unexpected withdrawals or wires, and see if you can see where the money “landed.” If you can’t, that could be a warning sign.
9. They “waste” assets. In many cases a spouse may fail to properly manage assets and let them decline, or sell assets at artificially low prices, what we call fraudulent transfers, in order to cheat their spouse from assets. Watch for transaction notices for brokerage accounts or for transfers of money into a shared account from a brokerage account.

If you were ever concerned with marital finances before your divorce begins, those same concerns can and most likely will occur during your divorce process. Don’t accept the financial disclosures of your future ex at face value: search the records for joint holdings and if necessary get advice from a financial advisor, a forensic accountant and your attorney. It’s critical that you have an experienced divorce attorney on your team to help you spot and resolve any attempts by your spouse to conceal money in order to gain a better settlement.

Scott Shaw is founder and principle of Shaw Law Firm PC, founded in 1995 and dedicated solely to divorce, family law and child custody matters that must be addressed and decided in the state of Georgia. Shaw Law Firm serves the greater Metro Atlanta area, particularly the counties of Fulton, Gwinnett, Cobb, Cherokee, Forsyth, Paulding, Henry, Fayette, Coweta, Newton, Walton, Bartow and Douglas. Schedule a consultation today at 770-594-8309 or contact us.