Divorce

Be Smarter: 8 Ways Your Spouse Can Hide Assets Before A Divorce

For those readers that have not seen, "The Other Woman" it is funny, cute comedy about a terrible man (played by Nikolaj Coster-Waldau) that does terrible things to his wife (Leslie Mann), and his two mistresses (Cameron Diaz & Kate Upton).
04/20/2016 02:49pm ET | Updated April 21, 2017

For those readers that have not seen, "The Other Woman" it is funny, cute comedy about a terrible man (played by Nikolaj Coster-Waldau) that does terrible things to his wife (Leslie Mann), and his two mistresses (Cameron Diaz & Kate Upton). One of the terrible things he does is move assets around, robbing his wife of her financial freedom in the event of a divorce. However fictional the movie was, it opens your eyes to a very real issue; the power that someone can obtain when there is 100% trust in the relationship. Assets can be hidden and transferred, without the other partner having any suspicion. Then, when the divorce happens, they won't even question it, because they don't know the assets exist in the first place.

3 in 10 adults with combined finances have hidden assets or purchases from their partner. The same study found that approximately 7.2 million Americans (4.4 million men and 2.8 million women) have hidden a bank or credit card account from their live-in spouse or partner. Furthermore, approximately 50% of marriages end in divorce. Knowing this does not mean every partner is deceptive and calculated, but it does mean that if you are not plugged into your family finances, you should be. Knowledge and awareness breed empowerment, and in the event of a divorce, empowerment can save your livelihood. Below are some tell tale signs that your partner could be hiding assets.

1. Transferring assets: The obvious, transferring assets from a joint account into an individual account. It may not be a unique strategy, but if you are not looking, it can certainly have you left in the dark.

2. Transferring assets to a friend:
One can easily transfer assets from an individual account to a friend. This can be done slowly and systematically over time, and if you don't look for it, you may not notice. Venmo and Chase Quick Pay make this process even easier to do without suspect.

3. Setting up a life insurance policy:
While there are many technicalities involved in setting this up, the right financial planner can assist your spouse in using life insurance as a tool to hide or protect assets.

4. Overpay the IRS:
If someone knows they are going to get divorced, they can overpay their taxes, and instruct the IRS to use it for the following year or years. This shows fewer assets in their accounts, but is difficult to trace.

5. Delaying receipt of payment:
If your partner has expected any big commissions or contracts to come in, and the cash is nowhere in sight, it is possible that they are delaying the payment until after a divorce.

6. Creating fake expenses: This is especially common when someone owns their own business or is an independent contractor. Faking or exaggerating business expenses can be written off a person's income, and therefore shows less profit on a tax return. This is also tax fraud.

7. Downplaying the purchase of expensive items:
Look out for purchases like art, antiques, or jewelry. Buying these items is a way to put money into something where the value can be overlooked and then sold after a divorce.

8. Lending money to friends or family: If a friend or family member complies with this plan, it can absolutely make your soon-to-be ex partners assets appear to be less than they are. They can then pay back the loan once the divorce has been finalized.

Hiding assets during a divorce is both illegal and immoral, but it certainly happens. Whether you are having difficulty in your marriage or not, stay educated about you and your partner's personal finances. Get online access to all of your accounts, ask questions, and build a relationship with your financial advisor and CPA. When it comes to finances, knowledge is your best friend. Perhaps if Leslie Mann's character was more plugged into their finances, her husband would not even have tried to deceive her financially!

Disclaimer:

This article is provided for informational and educational purposes only and contains information that is not suitable for everyone. As such nothing herein should be construed as the provision of personalized investment advice. There is no guarantee that the views and opinions expressed in this article will come to pass. Additionally, this article contains information derived from third party sources. Although we believe these third party sources to be reliable, we make no representations as to the accuracy or completeness of any information prepared by any unaffiliated third party incorporated herein, and take no responsibility therefore. This article should not be regarded as a complete analysis of the subjects discussed. All information and expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change without prior notice.

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