Getting a Divorce? Watch Out for Hidden Assets
Spouses must address many difficult issues when going through divorce, including child custody, child support and alimony. In addition, the division of assets and debts can be challenging, particularly if a spouse is hiding assets.
In many marriages, one spouse handles all financial matters while the other is not involved, not informed and possibly not even interested in money management. This may work well during the marriage, but during divorce both spouses need a full and accurate understanding of each other’s assets and liabilities.
Hidden assets can affect the division of property and the amount of alimony ordered by a judge. Whether the deception stems from greed, fear of not having enough money or other reasons, it is illegal. If you suspect your spouse is hiding assets, take the following steps:
Gather Past Tax Returns
If you and your spouse filed taxes as a married couple and you signed the tax returns, you have legal access to your tax records. Use past tax returns and accompanying bank- and retirement-account statements to measure income over the past few years. If your income decreased, or if bank or other financial statements are no longer mailed to your home, it is possible that assets have been diverted.
Look for Undisclosed Savings Accounts
Sometimes people open savings accounts in their children’s names to hold cash or conceal income obtained through hidden assets. The funds in or interest earned on these accounts may not be included in tax returns because the accounts are in children’s names and tax returns were not filed for them.
Watch for Intentional Overpayments
To temporarily relocate funds during a divorce, some people pay too much money to the Internal Revenue Service or other creditors. The overpayments eventually will be refunded, but due to long processing periods, the refunds likely will come after the divorce is finalized.
Hidden assets result in unfair divorce settlements. If you think your spouse may be concealing money or falsifying financial records, contact a knowledgeable divorce attorney to discuss your legal options.