Watching Out For Hidden Assets in a High-Asset Divorce

Watching Out For Hidden Assets in a High-Asset Divorce

Ex-spouses may resort to a number of methods to hide funds during divorce

Hiding assets from a court during a divorce may be considered fraud, yet many people continue to run the risk of running afoul of the law in the hope of getting a more favorable divorce settlement. In high-asset divorces, hidden assets may end up denying one spouse his or her rightful share of the couple’s property. According to Bloomberg, hidden assets are much more common during divorces then many people like to admit and those going through a divorce should be on the lookout for potential clues that an ex-spouse may be hiding assets.

Unusual business activity

One of the most common ways that people hide assets is through inflated “business” expenses. If a spouse owns his or her own business, a sudden drop in profits combined with an increase in expenses, especially just as divorce proceedings have begun, could be a sign that the spouse is using that business to hide income.

For example, Bloomberg points to one plastic surgeon who claimed his business’ profits were decreasing despite the fact that he was buying extra medical equipment, which would suggest the business was growing. Such tactics may appear amateurish, but in many cases the other spouse fails to follow up on such suspicious activity out of embarrassment or fear.

Signs of hidden assets

According to Forbes, there are a number of clues that could indicate an ex-spouse or partner is hiding assets or income. Some clues are more obvious than others, such as when a spouse begins making frequent flights to countries that have reputations as tax havens.

Other clues, however, are much subtler, such as a spouse opening a P.O. box, buying multiple cellphones, insisting on controlling online access to bank accounts, or hiring numerous financial advisors as a way of making sure none of those advisors has a complete picture of his finances. Additionally a spouse may begin buying expensive items, such as vehicles or artwork, which could then be converted back into cash once a divorce has been settled.

Investigating hidden assets

Finding out about hidden assets normally requires a lengthy and detailed investigation. Suspicion alone is not likely to be sufficient for a court to determine that a former spouse may be hiding funds, income, or other assets. However, somebody who may have evidence that assets are being hidden should contact a family law attorney as soon as possible. An attorney with experience in hidden asset investigations can discuss whether there might be substance behind a person’s suspicions that assets are being hidden by an ex-spouse. Further, an attorney can discuss the costs and benefits associated with attempting to locate hidden assets. Finding these hidden assets is not always easy, but it can go a long way towards making sure spouses get their fair share during a divorce.