Did you know that three in ten adults with shared finances have hidden assets or purchases from their partner? According to several studies, approximately 7.2 million Americans have hidden a bank or credit card account from their live-in spouse or partner.
So when it comes to divorce, there may be a discrepancy during the financial disclosure part of the proceeding. There are many cases where a spouse attempts to hide assets in order to prevent the other from getting part of them.
The following are some of the telltale signs that your spouse could be hiding assets:
- Transfer of assets. Whether they transfer assets from a joint account to an individual account or from an individual account to a friend, not knowing where your money goes can leave you in the dark and a victim of hidden assets.
- Overpay the IRS. If an individual anticipates getting a divorce, he or she can overpay their taxes, and inform the IRS to use it for the following year or years.
- Set up a life insurance policy. Life insurance can also be used as a tool to hide or protect assets.
- Create fake expenses. If a person owns a business or is an independent contractor, faking or exaggerating business expenses can be written off an individual’s income that shows less profit on a tax return. This is considered tax fraud.
- Delay payment. If your spouse has expected any profitable commissions or contracts to appear, but the cash is nowhere to be found, there is a chance that they are delaying payment until the divorce is over.
- Lend money to family or friends. If a friend or family member works together with your spouse, they can use this plan to make their assets appear less than expected.
- Downplay purchase of costly items. Be aware of expensive purchases, such as jewelry or art. These items can be sold for a high price if they are overlooked and not accounted for during divorce proceedings.