Going through a divorce can be a messy exercise, and unfortunately, some spouses attempt to hide assets before or during divorce proceedings to avoid sharing them with their soon-to-be ex.
Depending on one’s marital regime, assets acquired during the marriage can be split 50/50.
This makes it attractive for people who are angry at their estranged spouses or feel they have worked too hard to equally split the assets to try to hide assets.
Family law expert Bertus Preller said hiding assets during a divorce is a dishonest and unlawful practice.
The following can be signs that a spouse is hiding assets:
- They get defensive when you question them about their finances;
- When you find ATM receipts for accounts you are not familiar with; and
- When large withdrawals are made from your joint account without discussion.
The main objectives of concealing assets in a divorce are to:
- Not declare them at all, depreciate assets or conceal the extent thereof;
- Overstate debts to announce insolvency;
- Report revenue (income) to be less than it really is; and
- Claim expenditure to be greater than it truly is.
“Your possessions may consist of your matrimonial home, holiday home, financial investments, bank accounts, savings, shares, your retirement funds, pension plans, cash value on life insurance, and much more.”
Instead of depending on your spouse’s honesty or putting your trust in the fair and just conduct of legal advisers, wise up and look out for these tell-tale signs:
- Accounting:
They maintain that a computer containing crucial financial records has mysteriously crashed, eliminating hard-drive failure. They befriend a financial adviser and go “out of town on business” (to set up remote schemes).
- Assets:
They report an extraordinary decline in the value of marital and/or business assets and investments to dissuade suspicion. Assets are transferred to family or friends (to be reversed after the divorce).
- Banking:
They preserve or obtain total control of bank accounts, banking information and passwords. They also open several personal or business bank accounts to shift funds and set up bank accounts in the name of a child or friend.
- Business:
They fail to reimburse business expenses (postponed till after the divorce), overpay creditors or pre-pay suppliers (which can be refunded after the divorce). Family or friends are added to the payroll or paid for “consulting services” (to be paid back to you later).
- Expenses:
They make abnormally expensive purchases, such as on recreational toys or cars, art and collectors’ items (which can be sold again). Multiple cellphones or numbers are obtained in a short time (to hide interactions and dealings), and they make large amounts of drawings on debt (to enhance liabilities and stash the cash).
- Income:
They suffer a mysterious decrease in income but keep expenses the same while abstaining from receiving commissions or bonuses (until after the divorce).
- Legal:
They pressure their spouse to sign legal documents in a hurry without studying them thoroughly, propose mutual power of attorney for estate planning (to gain control) and establish ways to transfer funds to countries with less stringent monetary laws.
- Personal:
They complain about money or debt to avoid later suspicions, are vague or deceptive about financial affairs, accept accounts and statements in a private
postal box or mailing address and maintain the sudden failure of a business.
- Tax:
They submit false, under-reported tax returns and overpay the taxman (to be refunded after the divorce).
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