Something feels off about your spouse’s financial disclosures. The bank statements don’t match what you remember about income. Assets you knew existed seem to have disappeared. Your gut tells you money is being hidden, but you’re not sure how to prove it or what to do next.
Our friends at Kantrowitz, Goldhamer & Graifman, P.C. discuss how financial deception during divorce remains one of the most common tactics used to gain unfair advantage in settlements. An experienced family law lawyer who recognizes these red flags can help you uncover hidden assets and protect your right to fair property division.
Common Warning Signs Of Hidden Assets
Spouses planning to hide assets often change their financial behavior before filing for divorce. Sudden shifts in how they handle money, newfound secrecy about finances, or unexplained changes in lifestyle can all signal that something dishonest is happening.
Watch for decreased income claims that don’t match your spouse’s actual work situation. A business owner might suddenly report lower profits despite the company appearing just as busy. A salaried employee might claim reduced bonuses or commission income without a clear explanation for the decrease.
Unusual transfers or withdrawals from joint accounts deserve scrutiny. Large cash withdrawals, wire transfers to unfamiliar accounts, or payments to people or businesses you don’t recognize could indicate your spouse is moving money where you can’t see it. The timing matters too. Transfers made shortly before filing for divorce or during separation raise particular suspicion.
Red flags that suggest hidden assets include:
- Secretive behavior about mail, especially bank statements and financial documents
- New post office boxes or accounts you didn’t know existed
- Reluctance to share tax returns or financial information suddenly
- Claims that business revenue dropped significantly without reasonable explanation
- Lifestyle that doesn’t match reported income or asset levels
- Defensive or angry reactions when you ask routine financial questions
Your spouse might start paying personal expenses through their business, characterizing them as legitimate business costs. This reduces the apparent value of the business while effectively hiding personal spending. Discovering these tactics requires looking beyond surface-level financial statements.
Where Spouses Commonly Hide Money
Cash represents the easiest asset to hide. Your spouse might make frequent ATM withdrawals, keep cash from a side business unreported, or simply pull money from accounts gradually over time. Unless you’re tracking cash flow carefully, these withdrawals can go unnoticed until significant amounts have disappeared.
Cryptocurrency has become a popular hiding place for assets in divorce. Digital wallets can be difficult to trace, especially if your spouse set them up secretly. Bitcoin, Ethereum, and other cryptocurrencies don’t appear on traditional bank statements, and many people don’t think to look for these digital holdings.
Offshore accounts remain a classic method for concealing wealth. While reporting requirements make these accounts harder to hide than they once were, determined spouses still use foreign banks to shield money from division. The complexity of international banking regulations makes discovery challenging without professional help.
Friends and family members sometimes hold assets on behalf of your spouse temporarily. Money might be “loaned” to a parent or sibling with an agreement to return it after the divorce finalizes. Purchases might be made in someone else’s name with your marital funds. These arrangements are fraudulent, but proving them requires investigation.
Overpaying taxes or creditors creates future refunds or credits that your spouse can collect after the divorce. Similarly, delaying bonuses, raises, or contract signings until after the divorce means that income won’t get divided as marital property. Timing financial benefits to occur post-divorce is a calculated strategy some people employ.
How Forensic Accountants Uncover Hidden Assets
Forensic accountants specialize in finding money that people try to hide. They analyze financial records with a trained eye for inconsistencies, unexplained transactions, and patterns that suggest dishonesty. Their work often makes the difference between a fair settlement and being cheated out of your share.
These professionals trace money through multiple accounts and transactions to see where it actually went. They can follow a wire transfer through several banks, identify shell companies used to hide assets, and reconstruct spending patterns that reveal hidden income.
Lifestyle analysis compares your spouse’s reported income and assets against their actual spending. If they claim to earn $80,000 per year but spend $150,000, the forensic accountant identifies the gap and investigates where that additional money comes from. Credit card statements, mortgage payments, car loans, and everyday expenses all factor into this analysis.
Bank statements receive particular attention. Forensic accountants look for regular transfers to unknown accounts, unusual deposits, cash withdrawals that seem excessive, and any transactions your spouse tried to hide or delete from records. They also examine bank signature cards to identify accounts you might not know about.
Business financial statements undergo detailed review when your spouse owns a company. The accountant looks for personal expenses run through the business, inflated salaries paid to family members or friends, phantom employees who don’t actually work there, and inventory or equipment that disappeared from records without adequate explanation.
Discovery Tools Your Attorney Can Use
Your attorney has legal tools for forcing financial disclosure even when your spouse tries to hide information. Interrogatories are written questions your spouse must answer under oath. These can ask specifically about accounts, assets, transfers, and other financial matters.
Requests for production compel your spouse to provide documents like tax returns, bank statements, business records, and credit card statements for specified time periods. Failure to comply with proper requests can result in court sanctions.
Depositions allow your attorney to question your spouse directly under oath about their finances. When caught in inconsistencies or lies during deposition, your spouse’s credibility suffers for the rest of the case. Depositions can also include third parties like business partners, accountants, or financial advisors who might have knowledge of hidden assets.
Subpoenas directed at banks, brokerage firms, and other financial institutions produce records directly from the source. Your spouse can’t alter or withhold these documents because they come from the institution itself. This is particularly valuable when you suspect your spouse isn’t being truthful in their voluntary disclosures.
Gathering Evidence On Your Own
Before filing for divorce or revealing your suspicions, secure copies of all financial documents you can access. Make copies of tax returns for at least the past three years, bank and investment statements, credit card bills, mortgage documents, and business financial records if your spouse owns a company.
Take photos or scans of important documents if you don’t have time to make proper copies. Email these to yourself at a personal email address your spouse doesn’t have access to. Don’t use shared computers or cloud storage accounts where your spouse might discover what you’re gathering.
Monitor mail carefully for several weeks. Note what financial statements arrive, from which institutions, and addressed to whom. Your spouse might have accounts you don’t know about that send statements to your home. Photograph envelopes even if you can’t access the contents.
Check tax returns for schedules and forms that indicate income sources or accounts. Schedule B shows interest and dividend income and lists the sources. Schedule E reports rental income, royalties, and partnership income. These forms can reveal assets or income streams your spouse hasn’t disclosed directly.
Review credit reports for both you and your spouse if possible. The accounts listed show creditors and can help identify credit cards or loans you weren’t aware of. Inquiries section shows recent credit applications that might signal new financial activity.
What Happens When Hidden Assets Are Found
Courts take a dim view of spouses who hide assets during divorce. Judges can award the entire hidden asset to the innocent spouse rather than dividing it equally. They might also require the dishonest spouse to pay attorney fees and forensic accounting costs incurred to uncover the deception.
Some judges award larger shares of other marital property to compensate for the bad faith shown by hiding assets. Beyond just recovering the hidden asset itself, you might receive a more favorable overall settlement because your spouse violated their duty of financial disclosure.
In extreme cases involving substantial fraud, criminal charges could result. While unusual, intentionally hiding significant assets can constitute fraud, perjury, or contempt of court depending on the circumstances and amounts involved.
Protecting Your Interests
If you suspect your spouse is hiding assets, document your concerns and work with professionals who know how to uncover financial deception. Acting quickly preserves evidence and prevents your spouse from moving more assets beyond reach.
We work with forensic accountants and financial professionals who specialize in uncovering hidden assets during divorce. If you believe your spouse isn’t being honest about finances or you’ve noticed warning signs that money is being concealed, contact us to discuss investigation strategies and legal options for protecting your rights to fair property division.