How to Look for Hidden Assets in a Divorce

It’s no secret that once divorce is on the horizon, bitter spouses can get very protective about their assets. In situations where spouses don’t share all of their financial activities with each other, it’s very easy for a spouse to start moving things around once he or she feels threatened by an impending divorce. If you’re in a high-net-worth marriage, you may suspect that your spouse is hiding assets from you; it is not unusual for wealthy spouses to have this suspicion.

In 2011, the National Endowment for Financial Education, in cooperation with Forbes.com, released the findings of an online survey. The poll found that “31 percent of people who combined finances with their significant other have been deceptive with their spouse or partner about money.”

Some of the survey’s findings:

• 58 percent of respondents admitted to hiding cash from their spouse or partner.
• 54 percent of respondents said they had hid a minor purchase from their spouse or partner.
• More than 30 percent said they hid a bill or statement from their spouse or partner.
• 34 percent of the respondents admitted to lying to their spouse or partner about income, debt, or finances.
• 65 percent of women and 47 percent of men said their spouse or partner lied to them about income, debt, or finances.

If spouses are already lying to each other during marriage about finances, it’s safe to assume that a percentage of spouses would be committing more financial deception before and during a divorce. Whenever a spouse is refusing to produce financial documentation, or delaying it continuously, then it can be taken as a red flag. What are they trying to hide and why are they trying so hard to control the passage of financial information?

Look at the Tax Returns First

If you suspect that your spouse is hiding assets from you, the first thing to do is get your hands on the most recent tax return – the whole tax return. If your spouse fails to give you the entire tax return, this could be a sign that he or she is hiding something from you. Perhaps there is something on the tax return that they don’t want you to see. If you’re not familiar with tax returns, have your divorce attorney, an accountant, or a CPA comb through the tax return for the various types of income, the deductions taken, and any interest or dividends earned. Also, was there an overpayment of taxes? If so, those funds could be returned to your spouse after the divorce is finalized.

Look at the Business Transactions

If your spouse owns a business and you have access to the financials, look for salary paid to employees that don’t exist, or checks written to friends and family that are meant to be returned to your spouse after the divorce. Look for strange expenditures that could have been paid to a romantic partner, such as hotel stays, trips, fancy dinners, rent payments, and auto loans. If your spouse owns a business, you should have the statements reconciled with the income and expense statements; look carefully for any possible discrepancies.

Check Your Computer’s Search History

Does your spouse have a PayPal account? If you don’t think so, it still may be a possibility. PayPal is a great way for deceptive spouses to hide money from their partners because their spouse doesn’t see the transactions. If your spouse doesn’t have a PayPal app on their phone, you can check the browsing history on your home computer. Also scroll through the search history to see if any unfamiliar banking websites turn up.

Your Spouse Could Have Hidden Cash at Home

As impractical as it may seem, a lot of people hide cash in their home where they can easily access it – but don’t go looking under the mattress because that would be too obvious. Where do you start looking? In the garage, inside pill containers, in folders deep inside file cabinets, in the back of dresser drawers, in shoes, in suit jackets, in air vents, behind wall decorations and artwork, in DVD cases, in drop ceilings, under rugs, and in storage sheds. In reality, the possibilities are endless.

Finding Assets if You’re in the Dark

If your spouse has handled all of the finances and you have not been involved in paying the bills, filing the taxes, or otherwise tracking the finances, then you’re what’s called the “out-spouse.” In other words, you don’t have the passwords or access to the financial accounts, but your husband or wife sure does.

If you don’t have direct access to the financial data, we recommend asking your spouse for access to the accounts and financial records. If your spouse is willing to give you the information you need, then the process may not be too difficult. Unfortunately, it’s rarely that easy. If your spouse is not organized, it may take some time to get the information, but you can always help him or her.

On the other hand, if your spouse refuses to give you the information, it could mean they’re hiding either assets or debts, or both. Remember that with online access to virtually all types of accounts, your spouse should be able to get the information you need. If your spouse still refuses to produce the records, take this as a red flag that they could be hiding assets.