If divorce is imminent and a couple shares a significant amount of cash or property, it is possible that one or both spouses may attempt to hide assets from each other. While there are many ways to hide assets during a divorce, failing to report assets or providing false financial information can lead to serious penalties, including jail time.
The following are five common ways to hide assets in a divorce:
- Hide cash – Simply put, a spouse can regularly withdraw cash and literally hide the money from the other spouse. If you suspect your spouse of committing this act, check all your bank accounts. If you detect several withdrawals or a few significant withdrawals of large amounts of cash, your spouse might be up to something.
- Pay family members or friends – A spouse may claim that he/she owes a loved one or a friend a substantial payment. However, both parties may agree that this money will be returned to the spouse after the divorce is finalized. If your spouse attempts to do this, inquire about the purpose of the payment or loan and ask for the proper documents.
- Purchase expensive items – From furniture and antiques to jewelry and artwork, such items are quite costly. If your spouse pays for these items in cash, hiding the items or substantially under-reporting their value may lead to selling them after divorce. Additionally, a spouse may give these items to loved ones to be later returned after divorce.
- Open a custodial account – Although a custodial account is meant for children, a divorcing spouse may open such an account using his/her child’s social security number to hide money from the other spouse. Since a custodial account will not be factored into property division, a spouse can get away with hiding cash. Be wary of your spouse setting up custodial accounts for your kids.
- Overpay credit cards or the IRS – If a spouse overpays his/her credit cards, the money leftover can be used later—even after the divorce is finalized. If a spouse also overpays the IRS, he/she may receive a refund later.
If you suspect your spouse of hiding assets during the divorce, you need to monitor all joint checking and savings accounts, keep good records of your finances, and even hire experts to collect and examine the right evidence, especially if you are involved in a high-asset divorce.
If you are interested in filing for a divorce in Richmond, TX, call the Law Firm of Johnson & Gaskill PLLC at (832) 210-1698 or complete our online contact form today to schedule an initial consultation. Proudly serving clients in Fort Bend County and the surrounding region!