It is a stressful feeling when you suspect your spouse is hiding assets in your divorce. This concern is especially common in high-asset cases where finances are complex.
If your partner primarily controlled the money, you might worry about facing an unfair settlement based on incomplete information. Trusting your intuition is important. Certain behaviors are often red flags of financial information concealment.
Common red flags of hidden assets
When a divorce is on the horizon, look for sudden or strange changes in financial behavior. These actions often suggest an attempt to devalue the marital estate.
Common warning signs include:
- A lifestyle that does not match reported income (e.g., claiming poverty while still spending freely)
- Sudden, unexplained “losses” or new “debts” at a family-owned business
- Large, recent transfers of money or property to friends or family members
- New financial secrecy, like changing passwords, shielding bank statements or using a new P.O. box
- Your spouse suddenly claiming their income has dropped significantly
- The existence of new business entities or accounts you were unaware of
- Unusual or large cash withdrawals from business or personal accounts
These actions can make the marital estate look smaller than it actually is.
Common concealment tactics
Hiding assets goes beyond simply moving cash. A spouse might try to undervalue a shared business interest, arguing it is worth less than its true value. They might create fake “debts” to friends, planning to have the “loan” forgiven after the divorce is final.
Another common tactic is delaying compensation. A spouse might ask their employer to hold a large bonus, commission or stock option until after the divorce is finalized. They attempt to claim this money as their separate property, even if it your spouse earned it during the marriage.
How are hidden assets found?
If you see these warning signs, the legal system provides this process, often called “discovery,” allows your attorney to formally request a wide range of financial documents. This includes bank statements, credit card records, tax returns and business ledgers from both your spouse and third parties like banks or employers.
In many high-net-worth divorces, your legal team may also involve a forensic accountant, trained to trace funds and analyze complex records for fraud. They can investigate business records or trace transfers to uncover assets you may not have known existed.
If your spouse is caught hiding assets, a judge can factor this misconduct into the division. This may result in an unequal (but “equitable”) distribution of the total marital estate to compensate you.
Why acting quickly is important
If you suspect your spouse is hiding assets, you must act fast, as money can be moved quickly. Your attorney can request a temporary restraining order or preliminary injunction to freeze marital assets for fair division during the divorce.
The division of property in a divorce is permanent. Once the judge signs the final decree, it is extremely difficult to go back and claim assets you missed. That is why it is important to understand your rights and options before you sign a final agreement. A family law attorney can explain the discovery process in your state and help you evaluate your situation.
