Red Flags That May Mean A Spouse Is Hiding Finances During Divorce
Many people would do anything to hide assets from their partners during divorce. That is why you need to be alert to the red flags of hidden assets if you are divorcing your partner. Here are some of the classic warning signs you shouldn't ignore:
Lifestyle Doesn't Match Reported Income
Be wary of an expensive lifestyle that doesn't match your spouse's reported income. In many cases, it means that there is an unreported source of income or a hidden bank account from which the person is drawing funds to spend. For example, be alert when your spouse claims that their business has been failing for some time but has bought expensive jewelry or cars in the recent past.
Complete Control over Finances
Having complete control over family finances often means the person has something to hide. Therefore, be careful if your partner does all of these things away from your eyes:
- Handling all the tax issues
- Doesn't give you access to financial statements
- Wants to handle all bill payments on their own
Unusual Business Expenses
If your spouse owns a business, they can hide assets or siphon money out of the business by disguising their personal expenses as business expenses. Therefore, it pays to scrutinize the business expenses with special attention on the unusual ones. Scrutinize those expensive trips that suddenly come up, landscaping expenses that have suddenly ballooned or those delivery costs that don't seem to have "delivered" much.
Sudden Complaints of Financial Difficulties
Your partner may also try to keep you off the scent of their hidden loot by constantly complaining of their financial difficulties. This is likely to work if you are naturally sympathetic. For example, your partner may talk about the debts plaguing their business, the side business they tried but failed in or the contracts that they lost at the last minutes. You may find yourself feeling too sympathetic to dig in for more information, which may be exactly what the person wants.
This is another thing that should make you sit up and watch your partner's finances more carefully because it can be used to hide marital assets. Your partner may buy items that they are sure you don't need or admire, hold onto the items as sentimental objects during asset division, and sell them later to recoup their money. For example, they may buy rare books, expensive paintings or artifacts, and sell them after the divorce.
For more information, contact Nichols, Speidel, & Nichols or a similar firm.