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Asset Concealment & Divorce: 5 Red Flags to Watch For

When a marriage is headed for divorce, it is not unusual for one spouse to hide assets, usually money, from the other. This is especially common in situations where one partner was primarily responsible for paying bills, making investments, and managing cash flow. They conceal money and property, falsify expenses and debts, and pull other moves to ensure that the other spouse gets as little as possible.

If you have always let your spouse handle the money and are now about to divorce, he or she could be committing financial infidelity without you knowing it. Here are five red flags to watch out for if you suspect that assets are being concealed.

Money ‘Disappears’ from a Joint Account

One common tactic is to take money from joint bank and brokerage accounts and put it in private ones. If you see funds being transferred from a marital account but it’s not immediately obvious where the money ended up, it’s a danger sign. You would be well-advised to hire a forensic accountant to investigate these one-sided transactions.

Household Expenses Are Unusually High

Many grocery stores and businesses that supply household needs have a cash back feature that allows you to make a purchase with debit and ask for cash back. The total charge shows as whatever legitimate purchase was made, so the extra money is almost impossible to detect. If your monthly grocery bill was traditionally $300 but bank records state that it has inexplicably shot up to $500, investigate further.

The IRS Is Being Overpaid

Another common tactic for concealing marital funds is deliberately overpaying income tax and asking the IRS to apply the excess toward next year’s taxes. Once the divorce is concluded, the spouse will request a sizable refund. Watch for signs of tax overpayment, concealing of refunds, and other tax-related deceit.

Money Is Being Transferred to Friends or Family Members

It is a simple matter for your spouse to transfer cash and investments from marital bank and brokerage accounts into that of a close friend or family member. This strategy also involves that recipient returning the assets after the divorce is finalized. Watch for one-sided transactions that you don’t recognize.

A Family Trust Is in Place

With this trick, one spouse gives money to a family member, who then ‘gifts’ it back into a trust account. This could make the funds separate instead a marital property and not subject to division during divorce. There are different ways that this tactic can be applied, so be on the alert for unusual variations in standard payroll deposits.

If you are concerned that your soon-to-be-ex spouse is concealing marital assets, it is critical that you have an experienced divorce attorney who can help you pinpoint and prevent any attempts to hide money. At Haas Tharrington, P.A., we will work with you to ensure that you get the settlement you are entitled to. Call us today for a confidential consultation.