Playing hide ‘n seek was fun as a kid, but not when you’re an adult trying to find assets hidden by your soon to be ex-spouse.
In divorce cases, clients are frequently concerned about whether their spouse has hidden marital assets. Finding out whether he or she has done so can be a long and expensive process, often requiring a forensic accounting expert. Although an individual in-depth analysis is required for each case, below are some common red flags that a spouse may be playing “hide ‘n seek” with marital assets:
1. The spouse maintains separate bank accounts.
2. The spouse receives income from, or is employed by, an industry that deals in cash.
3. The spouse is self employed and runs personal or marital expenses through his or her business.
4. The joint banking account shows payments to an entity or person that the client does not recognize.
5. Deposits exceed spouse’s reported income or are from a source client does not recognize.
6. Financial outflow exceeds income.
7. The spouse is receiving “loans” from family, co-workers or employer.
8. The spouse has an interest in a closely held business.
This list is not exhaustive, but should be a starting point for discussing what types of discovery will be necessary and how much it will cost. Depending on the extent to which a client believes his/her spouse may be artificially suppressing the value of marital asses, dissipating or hiding them, will help the client decide whether it is worth spending thousands of dollars on discovery and/or a financial expert to ferret out these issues.