Divorce is messy, with both spouses arguing over the distribution of assets. The division of assets is a significant aspect of how divorce proceedings resolve, with the more slighted spouse usually getting the lion's share of the assets. To ensure that the distribution of the assets between the parties is fair, there needs to be a full accounting of what is available. This includes a full list of the properties, furniture, personal belongings, and financial assets you share with your spouse by marriage. This generally requires a fair amount of honesty and transparency from both parties so the court system can take a full accounting of all resources. However, not every couple is made up of honest people.
In some situations, one party will open a separate bank account to use throughout the divorce proceedings. This is occasionally used to help streamline the rebuilding process post-divorce and enable you to begin allocating assets once the dust settles. Other times, people use alternative bank accounts to hide assets illegally and gain an advantage over their future ex in terms of finances and manipulate alimony settlements.
With this article, we will be providing some tips on how to determine if your spouse is hiding finances.
If you are divorcing your spouse, the odds are good that you are not on friendly terms with them. We recognize this is probably an emotionally trying situation, and we extend our deepest condolences. However, the unfortunate reality is that spouses who are in conflict and pursuing a divorce might try to use unsavory methods to come out ahead financially. While this is likely an unpleasant thought, it is something that you will need to consider if you and your spouse are on bad terms.
When it comes to hiding finances, a few common methods are employed by the more dishonest individuals worldwide. While we do hope your spouse is not among this demographic, here are some common tactics:
While any funds tied up in these types of transactions might be dishonest, they are not strictly illegal. The laws will vary depending on your state, but if any of the funds are not properly declared in the aforementioned discovery phase, then your spouse might be guilty of perjury.
If your spouse perjures themselves while negotiating a divorce, they lose their credibility and break the law simultaneously. We realize that proving that your spouse is hiding funds, while beneficial to your claim, hurts. So, we hope this is not a situation you find yourself in, but if you are, there are some ways to secure evidence of their dishonesty.
One of the simplest methods for determining if any funds are being hidden is through financial documents. Specialized documents can serve as a paper trail of all transactions and bank deposits. These forms include:
Your legal team can use these forms to identify the types of financial exchanges that both you and your spouse have made. They provide a record for determining whether the finances being reported to the legal system are accurate. The acquisition of these documents is standard procedure during a divorce case's discovery process. Discovery involves having official records of financial statements and other hard evidence submitted by both parties, usually via their respective attorneys.
The exact laws surrounding discovery documents vary by state. However, in most states, it is possible to have financial documents submitted as discovery for your divorce case. Once the demand for these documents is set, your spouse will generally be obligated to provide honest records for review.
The discovery process of any case is extremely important as it will dictate the negotiations and help illustrate the evidence for both parties. The discovery folder's copies of your spouse's financial documentation will allow your legal team to determine if the numbers in the documents match up with the assets your spouse claims to have. If the records show that your spouse has more money than they are claiming, it will reflect poorly on their case and could help you secure a more favorable divorce settlement. However, financial documentation is not the only source of information on your spouse's finances.
While your spouse is legally obligated to report their finances honestly or risk perjuring themselves, some might try their luck. If they do, it might require you to take matters into your own hands to get an honest answer from them. At the same time, you cannot go snooping into the private bank accounts of your spouse or fully investigate them to a level where you will uncover any hidden funds. However, if you suspect your spouse is dishonest with funds, some states allow you to hire professional investigators to look into your spouse on your behalf.
The most common contractors for investigating your spouse's misconduct are private investigators. Several states permit private investigators to look into the comings and goings of your spouse. Traditionally, private investigators are usually hired to confirm a spouse's infidelity to help with the divorce. However, they can also investigate any attempts to deposit money into a bank account you do not recognize. Private investigators cannot directly investigate the account itself but are trained to follow and surveil the specified target. If your spouse stops off at a bank, a P.I. will attempt to gather evidence of their deposits and withdrawals to confirm with you.
However, if you are looking for a professional who can accurately assess your spouse's finances, you might want to look into a forensic accountant. Normally, accountants help you manage your finances and estimate your projected earnings, among other financial obligations. However, forensic accountants can be hired to look directly into the financials of your spouse for any misconduct. In addition, forensic accountants are frequently retained during divorce proceedings to evaluate discrepancies in your spouse's finances.
Using these contractors will give you a deeper insight into the financial standing of your spouse. Uncovering these details will not only aid you in uncovering your spouse's deception, an affront in and of itself, but it will also secure a superior divorce settlement, although we know you are probably more hurt by the former.
Perhaps the most common method of ascertaining information about your spouse's financial status, depositions are common in legal proceedings. A deposition is another part of the discovery process in which a witness is questioned on the alleged incident. When it comes to a divorce, depositions are not as common since there is usually no crime or negligence involved. However, when you believe your spouse is hiding finances from you, depositions can be used to question those who might be providing funds to your spouse.
For example, you could depose your spouse's employer to get an honest assessment of your spouse's income along with any bonuses they might have received. These depositions can help illustrate a clear picture of what kind of pay your spouse makes regularly. This way, discrepancies can be discovered more easily. Depositions can become one of the best tools you have in a legal setting.
In addition to depositions, you can use interrogatory documents which are written questions that your spouse must answer in writing. Your spouse must answer the questions truthfully, and if it is discovered that they answered the interrogatories with false claims, your spouse will be perjuring themself when the divorce reaches a judge's ears. A similar document is a request for admission, in which your spouse must admit that specific statements are true. The latter is a sort of confession admissible as evidence to a court.
Sometimes, the best evidence is testimony from those involved. However, understanding the methods to find evidence of hidden assets and how this will impact your spouse are different things. If your spouse is guilty of hiding funds and perjuring themselves, they will be in for a rude awakening.
Divorce is an emotionally turbulent time, and a great deal of uncertainty is involved. When this situation arises, it is common to make emotionally impulsive decisions. When it comes to hiding funds, it is possible that your spouse only began doing so out of fear and uncertainty. However, it is often an attempt to brace themselves and is a thought-out decision to try and financially survive the divorce. This behavior is incredibly dishonest and outright illegal if they fail to report these funds to the presiding judge. The cost of perjury is high; if your spouse is guilty, they will be forced to pay it.
During the discovery phase of the divorce proceedings, the financial balances of your spouse will come to light. If hidden funds are discovered, the judge will inflict penalties on your spouse depending on their infraction's state and severity. The penalties become especially steep if your spouse perjured themselves by lying about their hidden assets while under oath. If your spouse is found to have lied while under oath, they will have to pay fines and will also likely be sentenced to a prison term.
According to federal law, the prison terms issued for perjury can last up to 5 years, but state law determines the actual term. Also, judges can exercise leniency in state courts as they see fit. So, there is a possibility your spouse will owe money in fines for their perjury but will be given a probation term rather than a prison sentence. Either way, your spouse will still be held accountable for perjury and face serious consequences.
We know divorce is a deeply unpleasant way to end a marriage, especially since we have no doubt you were committed to making it work. However, when these things happen, it is perfectly reasonable to want to try to defend yourself financially. We know you want to be able to trust your spouse even when going through a divorce, but the unfortunate reality is that there is always going to be a risk of dishonesty on their part. We are not saying they are guaranteed to hide funds and attempt to deceive you, only that it is a real possibility. Divorces can be messy and rife with animosity between you and your spouse, but an attempt to hide funds cannot be abided on either side.
When it comes to divorce, the law is very complex and can be extremely difficult for anyone to navigate without some assistance. While the finer points of divorce law require education in law to comprehend, the information relevant to the general public is a little more accessible. With some research, you can find very helpful information to help you prepare for one of the more trying experiences of the human condition.
We know that it is the last thing you ever want to research but learning more about divorce law could be very beneficial. We hope this article has given you some insight into the risks of hidden assets, and we hope you can live a happy, healthy life despite it all.