When undergoing divorce proceedings, it is imperative that each spouse provide full disclosure of their assets. It is never advisable to hide assets if you are heading for divorce. If you suspect that your spouse may be concealing assets, you should tell your lawyer, who will take you through the options you can use to ensure a fair and valid asset division process. This may include hiring a forensic CPA who specializes in finding hidden assets. Take steps to protect your financial interests, including efforts to uncover any assets your spouse may be hiding. If hidden assets are discovered, there are often severe consequences for the spouse who has chosen to conceal what they have.

How to Tell if Your Spouse is Hiding Money During Divorce

During the divorce process, it’s crucial to remain alert for signs that your spouse may be attempting to hide assets. Divorces require full disclosure of marital property, but one spouse may try to conceal their financial assets to gain an unfair advantage in the division of assets or the divorce settlement.

Key Indicators Your Spouse May Be Hiding Assets:

  • Unusual Banking Activity: Watch for large withdrawals, hidden bank accounts, or frequent transfers to unfamiliar accounts. Spouses may try to hide assets during divorce proceedings by moving money to new accounts or family members’ accounts.
  • Unexplained Debts or Liabilities: Some spouses will claim they owe significant debts, which reduces the portion of marital assets they’re required to share. Watch for sudden “debts” or “loans” that weren’t mentioned before the divorce process started.
  • Lifestyle Changes That Don’t Match Reported Finances: If your spouse claims a lower income but continues to make large purchases, maintain luxury items, or go on expensive vacations, it could be a sign that hidden assets are funding these activities.
  • Shifts in Ownership of Property or Business Assets: Spouses sometimes transfer assets to family or friends to remove them from marital property calculations. This might include signing over car titles or “gifting” physical assets to others.

If you believe your spouse is hiding financial assets, contact an experienced family law attorney. A divorce lawyer can help you identify the right steps to uncover hidden assets and protect your rights during the division of assets.

Signs Your Spouse Might Be Hiding Assets in Divorce

If your spouse is hiding assets during your divorce, you may notice several warning signs. Since hiding assets can affect child support, alimony, and the division of marital property, it’s crucial to recognize these red flags early.

Red Flags Indicating Your Spouse Might Be Hiding Assets

  • Sudden Changes in Financial Control: If your spouse suddenly takes control of the family’s finances, changes passwords, or blocks your access to joint accounts, they might be trying to hide assets.
  • Unexplained Withdrawals or Transfers: Look for unusual ATM withdrawals or transfers from joint accounts to private accounts. This could signal an attempt to conceal financial assets.
  • Hidden Property or Physical Assets: If you notice that expensive items (like jewelry, cars, or artwork) have “disappeared,” they may have been hidden or sold.
  • Underreporting of Business Income: Spouses who run businesses might claim lower-than-actual income, delay payments, or overstate expenses to reduce marital property division.
  • Excessive Cash Transactions: Using cash instead of credit cards can make financial transactions more difficult to trace. If your spouse suddenly prefers cash payments, it could be part of an effort to hide money.

If you notice any of these warning signs, speak with a family law attorney. Divorce court judges take hiding assets seriously and impose severe penalties on those found guilty of hiding assets.

What Happens if You Don’t Disclose Assets in a Divorce?

If it is found that one or both of the partners tried to hide any of their assets, it can cause a great deal of trouble for that partner, and possibly work in the other partner’s favor. Each party is legally required to disclose all of their assets, which means that failing to do so amounts to contempt of court. A judge may issue sanctions and require the spouse to pay the other’s legal fees, for example. The hiding of assets could even lead to a judge imposing higher alimony payments. In some cases, attempts to withhold assets during divorce can even lead to criminal charges. 

What to Do if You Suspect Your Spouse is Hiding Money

If you suspect your spouse may try to hide assets during divorce proceedings, taking immediate action is essential. Failing to act quickly could result in a smaller portion of marital property being awarded to you after the divorce is finalized.

Steps to Take If You Suspect Hidden Assets

  1. Contact an Experienced Family Law Attorney: A skilled divorce lawyer will help you determine your legal options for discovering hidden assets and filing the necessary motions in court.
  2. Collect Financial Documents: Your attorney will ask for tax returns, bank statements, business records, and other documents that reveal your spouse’s financial activity.
  3. Hire a Forensic Accountant: A forensic accountant is trained to track financial assets, transfers, and hidden funds. Their reports can be used as evidence in divorce court.
  4. Request Court Orders and Subpoenas: If your spouse refuses to disclose assets voluntarily, your lawyer can request subpoenas to obtain records directly from financial institutions.

If you take these steps, you’ll be better positioned to achieve a fair divorce settlement. The legal process of uncovering assets can be lengthy, but the effort is worth it to ensure an equitable distribution of marital property.

What is the Penalty for Hiding Assets in a Divorce?

If a spouse is caught hiding assets, the court will likely require them to pay the other spouse’s share of the assets to them. For example, if one spouse is found to have hidden $20,00 in assets, the court may require that they pay the other spouse $10,000. However, there is even more at stake: if a spouse is found to have concealed assets, they could face perjury charges, which carry up to four years of jail time. It is even possible that fraud charges could be brought against the guilty spouse. Fraud is a criminal offense that carries severe penalties. The court could also order the offending spouse to pay for all investigation and legal costs and award even more of the marital assets to the other spouse.

Can Hidden Assets Affect Child Support or Alimony?

Yes, hidden assets can significantly affect child support and alimony payments. Since child support and alimony are calculated based on each spouse’s financial position, hidden funds can reduce the paying spouse’s obligation.

How Do Hidden Assets Impact Support Payments?

  • Alimony Payments: If your spouse hides financial assets, they may claim to have lower income, which could reduce the amount of alimony you receive. Courts can impose sanctions on spouses who attempt to hide assets, sometimes awarding a larger portion of the marital assets to the innocent party.
  • Child Support Payments: Child support is calculated using each parent’s income. If one spouse hides income or financial assets, it results in a lower child support payment. If hidden assets are discovered, courts may order retroactive payments.

If your spouse is found guilty of hiding assets, the divorce court can impose penalties, require them to pay investigation costs, and order them to pay your legal fees. The equitable distribution of assets is critical to ensuring child support and alimony are properly calculated.

How Hidden Assets Can Be Found in Divorce Proceedings

Discovering hidden assets during divorce proceedings is a crucial part of ensuring an equitable distribution of marital property. Hidden funds, physical assets, and even business profits can all be concealed during the legal process. Fortunately, there are several tools at your disposal to find these concealed assets.

How Do Divorce Lawyers and Experts Discover Hidden Assets?

  • The Discovery Process: As part of the divorce process, each spouse must disclose their assets. A divorce lawyer can demand financial documents, such as bank statements, investment records, and tax returns. This discovery process can expose attempts to hide assets.
  • Forensic Accounting Investigations: A forensic accountant is trained to track financial activity and identify hidden funds, transferred assets, or undervalued property. They can find evidence of hidden assets during a divorce that an untrained person might miss.
  • Subpoenas for Financial Records: If one spouse refuses to cooperate, legal action may be necessary. Subpoenas can be issued to obtain bank records, loan applications, and other financial statements.
  • Review of Public Records: Property deeds, business filings, and asset transfers can be found in public records. If your spouse suddenly “gifts” property to a family member, it may be a tactic to hide assets.

Uncovering hidden financial assets requires skilled legal guidance. A knowledgeable divorce lawyer and forensic accountant can work together to ensure no portion of marital property is overlooked.

Hire Our Divorce Attorneys

Westover Law Group is a company of family law attorneys serving Southern California. Contact us if you are going into divorce proceedings and need a lawyer on your side. If you suspect that your spouse is hiding assets, be sure to let us know so we can investigate further. Contact us for more information.