A gender stereotype that unfortunately still lingers in modern divorce is that of the greedy husband conniving to hide assets in some secret offshore account, determined to do everything he can to keep his ex-wife from getting her hands on his secret millions.
One spouse attempting to hide or conceal marital assets from the other spouse can sometimes be an ugly — and illegal — reality in divorce. But the outdated assumption that only male spouses engage in this behavior is not only inaccurate, but it is also potentially disastrous for men trying to reach a fair financial settlement in their divorce.
In recent decades, earning power has shifted within most marriages. According to the Bureau of Labor Statistics, in about a third of married heterosexual couples in the United States, women bring in half or more of total family earnings, a significant increase from the past. Within these marriages, about 80% of higher-earning women have also assumed control of the marital finances — from monitoring and paying monthly credit card bills to completing the couple’s tax returns to managing the couple’s investment portfolio.
Speaking as a divorce attorney, I can tell you that in today’s world, either spouse can hide assets — as long as they have the means and motivation to do it.
Because the gender assumptions around this issue remain so entrenched, however, men may be missing out on the information they need to spot the warning signs of a spouse hiding assets.
So let’s correct that. Here are some red flags of hidden assets to watch out for in divorce.
Overpaying the IRS or creditors. Your spouse may tell you that the huge withdrawal they made was to pay off their credit card, or pay an old IRS debt. If that’s the case, demand to see the bill. Overpaying a creditor, and then applying for a refund later, is a slick way to temporarily push some cash into hiding until the divorce process is wrapped up.
A sudden interest in art and antiques. If your spouse suddenly turns into an antique collector just as your marriage is reaching its demise, it may be worth investigating the real worth of the items they are amassing, especially if the spouse is adamant in keeping those items in the divorce. Some spouses may claim that a painting they picked up was a thrifty yard sale find, when really it’s a valuable work of art paid for with carefully siphoned funds. After divorce, the art will be sold to the highest bidder and converted back into cash.
Unusual financial account activity, no matter how big or small. Frequent withdrawals from checking or savings accounts, missing IRA deposits, or closing out a pension account — where is all this money going? Some spouses even take secretive measures to transfer stocks and other assets to children or their close relatives, business partners, and even dummy companies they’ve set up for the sole purpose of hiding money until after the divorce.
Disappearing account statements. Have paper copies of bills and bank statements stopped arriving in the mail? Did you once have online access to all your joint financial accounts, but suddenly the passwords or associated email addresses have changed? If you have noticed this red flag, contact the financial institutions directly to have paper copies sent to you. Request that these are sent certified mail, signature required to ensure delivery without interference.
New interest in Bitcoin and cryptocurrencies. You’ve noticed your spouse reading articles about Bitcoin, or maybe you spotted an app on their phone that looks related to cryptocurrency. When you ask about this new interest, you are met with silence. What’s really going on? Spouses intent on hiding assets may think that new unregulated cryptocurrencies are the new “safe spot” for dumping money until the divorce is over. However, there are many clues to trace Bitcoin activity. Look for small and regular transfers from accounts that may be going to Coinbase or other Bitcoin trading sites, or even Paypal. Some Bitcoin traders are willing to accept goods in exchange for an initial Bitcoin, so also be on the lookout for any large online purchases made by your spouse that never ended up at your home.
Your spouse’s divorce case statement is missing financial items that you know exist. As your divorce begins, you and your spouse will exchange financial statements disclosing income and assets. If you file for divorce in January and you know that your spouse’s year-end bonus has always come by the end of December, it can be a red flag to not see this amount listed in the income section. Did they ask their boss to delay disbursement of the bonus until after the divorce filing date so that this money could have a better chance of “flying under the radar”? Carefully comb through the case statement to look for any income or asset irregularities.
How forthcoming is your spouse about sources of income? Money coming in that goes beyond the usual paycheck can include:
– Overtime and extra duty,
– Pension/retirement payments,
– Social Security payments,
– Disability income,
– and Unemployment compensation.
If you believe your spouse made money through one or more of these means, but you are not seeing it declared anywhere, it’s best to let your attorney know.
Here’s the good news. However clever or crafty a spouse may be at hiding assets, the divorce process itself has many built-in measures to uncover concealed assets. If your spouse omitted information on their case statement, for example, your attorney can ferret out this information by issuing a demand for certain documents or requesting a sworn deposition during the discovery phase of divorce. There are forensic accountants who can be enlisted to perform a careful analysis of marital finances to uncover secretive activity.
The bottom line? In today’s more fluid world, where women and men share and swap roles in the family between family breadwinner and family caretaker with greater ease, there is simply no longer room for outdated ideas to rule how we approach any aspect of divorce.
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