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Is your spouse hiding assets in preparation for divorce?

Getting divorced is rarely easy, and one of the challenges couples sometimes face is deciding how to divide up assets.

The courts consider what property is marital property, and what is separate property. They strive to make things equal, but it doesn't necessarily mean that the division is 50/50 from a strictly financial standpoint. It is based on what the court deems as fair, and how each person's separate life is likely to look after the divorce. 

But as if this issue weren't complex enough, there are many who try to push the scale in their favor by attempting to hide some of their assets during the divorce process that they can later access after the divorce is final. Almost any divorce may see some of these tactics, but in a high-asset divorce, this can become a major concern. Here are some of the tactics that are commonly used to illegally hide money in order to prevent it from being considered as part of the division of property.

Transferring into Other Accounts

The simplest transfer is to put money from a joint account into an individual account, but it is also one of the easiest to check. Some people will try to transfer money to a friend or other family member who will hold the money for them until after the divorce. Sometimes this is done over time so that it is not very noticeable, but it can turn into a large sum over time.

Waiting to Get Paid: When friends, family or clients need to pay a person back for services or just pay back loans they have borrowed, a person who is trying to hide assets will sometimes tell the person who owes them money to hold off paying until after the divorce. If the money is marital property, the payback would go to both of them, and by waiting the asset-hiding spouse is theoretically able to keep it for themselves.

Overpaying taxes: Some people who anticipate a divorce try to give Uncle Sam a little something extra from their paychecks in anticipation of a larger refund -- after a divorce is final.

Setting up a Life Insurance Policy: Many life insurance policies build cash value, and some people may start one without ever intending to use it for its intended purpose.

Undervaluing Purchases and Overvaluing Expenses: Many items are much more valuable than they look to the average person. A painting can be claimed to be done by a "starving artist" and officially valued at no more than a couple hundred dollars, but may actually be sold for thousands because the artist is known after all. Multiply that by several similar "knickknacks," and you've got a pretty good payday.

When it comes to expenses, if one person is an independent contractor or owns their own business, they may manipulate numbers to make it seem as if they have higher operating expenses than they actually do. Chances are, they may be doing this in hopes that the court will decide they need a larger share of the money. For example, they might buy an expensive computer that they barely touch for business purposes, but use extensively for personal use.

Sometimes hiding assets is done in a way that makes it obvious one spouse is trying to get more than they deserve. Sometimes, it is just an attempt to pull some money together to start over, without having to rely on the court to be fair. If you suspect your spouse is attempting to hide assets from you and/or the courts, don't wait until your divorce is final to speak to an experienced family law attorney who is willing and able to investigate your division of property and assets for these illegal practices.

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