Trust and transparency may be the first casualty when many couples undergo a divorce. Before taking this step and negotiating marital property division, you should be aware of the ways that spouses hide marital assets.
Bank and credit card accounts
If your spouse had paychecks automatically deposited into a bank account, review check registers and credit card statements to determine whether there were unusual withdrawals or outlays. Cash hidden in secret locations or deposited into a relative’s bank account will likely be a small amount.
Money taken from brokerage accounts, lines of credit and card cash advances will likely appear on those account statements. Review those statements to determine whether any of those funds are missing.
Spouses may have substantial funds from business and medical reimbursements. Try to remember your spouse’s recent business activities when determining if reimbursements are missing from account statements. Spouses may also delay the submission of expense reports, so they do not receive reimbursement until after divorce.
Likewise, a spouse may have their employer delay a bonus or raise until after the divorce to avoid sharing this income with their soon-to-be divorced spouse. That spouse may also earn extra money in cash at work that was not reported on tax returns.
Determine what your spouse spent each month on items like restaurant meals, haircuts, other routine expenses, and minor emergencies. These were paid in cash if these costs are not contained on bank or credit card statements. The amount spent on these routine expenses is the additional income earned by your spouse.
A spouse making contributions to custodial accounts established in their children’s names may plan to withdraw these funds after divorce. Frequent additions and withdrawals over many years may indicate that the fund is not being used for the children but as a spouse’s personal account.
A spouse may have an arrangement to pay off a fake debt to a friend or relative which will be retuned after the divorce. Determine the purpose of these loans and what happened to the funds that were purportedly borrowed.
A spouse can try to reduce income by holding off billing clients or customers until after divorce. Or expenses may be recorded for nonexistent employees or contractors, but the checks are never cashed. These checks will probably be voided after divorce but will reduce the income available for support.