Divorce gets complicated. People make emotional decisions. They make financial decisions. When these two worlds collide, they may even violate the law.
One example of this is when, rather than disclosing all of their financial assets, people attempt to hide them. An angry spouse who found out their husband or wife was unfaithful to the marriage may do it in an effort to get back at them by depriving them of the money they have a rightful claim to as they get divorced, for instance. Even when it’s not so dramatic, people may just try to get the most out of the split and find that hiding assets helps them toward that end.
So, how do they do it and what red flags should you watch out for? Here are a few common tactics:
- Overpaying bills, such as taxes or credit card statements. This triggers a return check, which they then keep to themselves.
- Giving money to friends. This is so simple that it’s one of the most common ways to hide money. They’ll often have an excuse, like saying it was a loan, a gift or the repayment of a previous loan.
- Putting money in other accounts. This can work, though electronic transfers leave many records. However, a spouse can have a secret account where they stash money.
- Building up the stash over time. A one-time transfer of $100,000 may be a clear red flag, so some people just skim a little bit of money for months or years.
- Creating fake expenses. Business owners will sometimes do this to hide their personal money within the business.
If you think your spouse has done any of this, it’s critical that you know your rights.