In any Houston marriage, there’s usually one spouse who is more in control of the finances, or who comes into the marriage with greater assets or income. This difference can be particularly pronounced in higher net worth marriages. In a divorce, this gap in financial control, experience and net worth can create an imbalance of power. The less savvy partner is often called the “out spouse” — and, often without even realizing it, she or he tends to get the short end of the stick in a divorce.
Keeping secrets or lying about money in a marriage is serious, and has a name: financial infidelity. According to a recent poll, one in three people admitted to acts of financial infidelity. In divorce, it’s not just serious: It’s fraudulent and illegal. However, there are many sneaky ways to hide assets during a high net worth divorce, and it’s often up to the out spouse to sleuth them out.
A spouse can conceal assets in creative ways. Transferring assets to a separate, non-joint account is fairly common. Transferring them to a friend or relative is a little more cunning, but still happens often. Some people believe that simply asking Uncle Joe to hold on to some cash during the divorce is legal. It is not, and spouses need to obtain and watch bank records carefully for unexplained large transactions. However, many spouses are more careful, taking out only small cash transactions at a time to avoid detection.
One particularly creative scheme involves overpaying the Internal Revenue Service, or paying in advance for the following year. In essence, this is similar to the last scenario, with Uncle Sam unwittingly doing Uncle Joe’s dirty work. Others artificially deflate income by not invoicing clients, asking for delays on promotions and raises, or deliberately delaying the receipt of commissions.
Dropping wads of cash on luxuries or gifts, or inventing phony expenses are other proven ways to dupe unsuspecting out spouses out of marital assets they deserve. When all else fails, there’s always the amnesia clause: Some spouses conveniently “forget” about stock options or retirement accounts.
This list can be intimidating to consider. Many Houston spouses don’t even have full access to their financial records, and may not be savvy enough to handle this level of detective work without the help and guidance of a divorce attorney, and possibly a divorce financial adviser or forensic accountant.
Source: Daily Finance, “10 Easy Ways to Hide Assets From Your Spouse” Robert Pagliarini, Apr. 01, 2014