What To Do If You Suspect Your Spouse Is Hiding Assets

Financial dishonesty within marriages is not a rarity. Indeed, the National Endowment for Financial Education reports that approximately 43% of adults have admitted to financial infidelity, which involves a party in a relationship intentionally deceiving their partner about money. This can include hiding debts, making major purchases without discussing them, or even having secret bank accounts.

Even if a spouse does not breach trust and lie about their assets or debts in a marriage, they may do so during their divorce, which can lead to difficulties, particularly when it affects the fair division of shared property. When an individual hides assets during a divorce, the implications can be severe. The concealed assets can lead to inequitable division of property, unjust alimony settlements, and inadequate child support payments.

It is important to note that concealing assets or debts during a divorce proceeding is against the law.

In this blog, we will discuss ways that individuals often try to conceal assets. We will also outline what steps you can take if you believe that your spouse has hidden assets.

How Assets Are Often Hidden During a Divorce

To effectively navigate a divorce where asset concealment is suspected, it is essential to understand the various methods that may be used to hide assets and the legal strategies available to reveal such hidden wealth.

Parties may attempt to conceal assets in the following ways:

• Creating phantom debt. Some spouses may collude with business partners or others to create fake loans or expenses.
• Delaying salary increases, bonuses, or new contracts. A spouse may ask an employer or client to delay payments until after the divorce.
• Overpaying the IRS or creditors. By overpaying, a spouse creates a future tax credit, essentially hiding money.
• Purchasing expensive items. Some spouses may buy expensive items like artwork, antiques, or vehicles, which they plan to resell after the divorce.
• Transferring assets to a third party. Spouses may transfer money or property to a friend or family member with the intention of getting it back after the divorce is finalized.
• Undisclosed bank accounts. Creating separate, hidden bank accounts and moving money into them is quite common. Some may even create offshore bank accounts, which can be more difficult to trace, or create bank accounts in the name of their child.
• Underreporting income. A spouse may underreport their income or claim higher expenses to make it seem like they have less money.
• Using cryptocurrency. Cryptocurrency, with its anonymous nature, provides a modern method for hiding assets during a divorce. A spouse could purchase cryptocurrency and store it in a digital wallet, making it difficult to trace. They might also use cryptocurrencies to pay for items or services without leaving a traditional paper trail. Cryptocurrency transactions can be complex and challenging to track without the correct knowledge or tools, adding another layer of obscurity.
• Hiding cash. Some spouses may withdraw money and hide the physical cash or cash-equivalents, like cashier’s checks or savings bonds.

Behavioral markers that you should look for include:

• Sudden changes in financial behavior
• Unexplained withdrawals or expenses
• Discrepancies between reported income and lifestyle
• Missing documents or records

What to Do If a Spouse Is Hiding Assets in WA

Here are six steps you can take if you believe a party is hiding assets during a divorce:

1. Hire a divorce attorney. Enlist the help of a divorce lawyer, especially one with experience in uncovering hidden assets. They will know how to navigate the legal system and can provide valuable advice.

2. Retain a forensic accountant. If you suspect your spouse is hiding assets, hiring a forensic accountant can provide peace of mind that all resources are being accounted for. A forensic accountant is a professional who utilizes accounting, auditing, and investigative skills to examine an individual's or a business's financial statements. Their role goes beyond the simple crunching of numbers. They are often called upon to interpret financial data, identify irregularities within the data, and provide expert testimony in court.

In the context of divorce proceedings where one spouse believes the other is hiding assets, a forensic accountant can be an invaluable resource. They have the skills and expertise to delve into complex financial records and uncover inconsistencies that may indicate concealed assets. Forensic accountants not only look for hidden cash but also undervalued assets. These can include properties, businesses, or investments that have been intentionally undervalued or overlooked during the divorce proceedings. They can also trace funds to discover hidden or offshore accounts that a spouse may be using to conceal wealth.

3. Collect financial documents. Gather as many financial documents as you can. This includes bank statements, credit card bills, tax returns, and any business records if your spouse owns a business. An attorney can also help you obtain documents during the discovery process if you cannot locate or access helpful financial documents.

4. Review tax returns. Tax returns can provide valuable insights into your spouse's financial situation. Look for discrepancies between reported income and lifestyle or unexplained sources of income.

5. Examine financial histories. Reviewing your spouse's financial history can help you spot patterns or irregularities that might indicate hidden assets.

6. File a court order. If your spouse continues to hide assets, you can file a court order to force them to disclose their finances. Your divorce lawyer can guide you through this process.

Financially Complex Divorce Cases

McKinley Irvin’s legal teams are experienced with divorce matters involving complex financial situations, including hidden assets, and have access to professional experts to assist in protecting your financial situation. Please get in touch if you would like to discuss your case with one of our attorneys.