This might sound counterintuitive, but the more transparent and communicative the divorce process, the better the outcomes for both parties. When information is shared openly, it’s easier to come to a settlement that both sides are comfortable (or as comfortable as can be) with.
Yet, while transparency is ideal, it’s not a given. In some circumstances, former partners are reluctant to disclose information, especially financial information.
If you suspect your soon-to-be ex is hiding financial information or assets during divorce, being proactive can protect your interests and the integrity of the divorce process. These 10 signs could mean it’s time to mention something to your divorce attorney.
10 signs that indicate your spouse may be hiding assets from you
During divorce proceedings, certain actions or behaviors indicate your spouse is attempting to conceal assets. Here are some of the most common ones to be aware of.
1. They’re secretive about joint financial matters
Whether they’ve always been tight-lipped about finances or there’s been a recent change in behavior around money, it may be a sign they’re not sharing necessary information.
This might involve being vague about their employment situation or delaying conversations about money issues. Document these instances and share them with your attorney so they can assess the situation.
2. They’re underreporting income
Underreporting income is another common way to conceal assets, and it can be especially easy for those who are self-employed or paid in cash. It could warrant a closer look if your former partner’s lifestyle or spending habits seem misaligned with their reported income.
Keep in mind that if you and your spouse file taxes jointly, this misrepresentation to the IRS could result in legal consequences for both of you. Discuss this with your divorce attorney, who can help you work with tax professionals to protect your financial standing.
Also, most courts are mandated reporters to the IRS about tax fraud, so make sure you and your attorney talk about how that may impact your ongoing proceedings.
3. Something seems off about your mail
Mailboxes can quickly get crowded with credit card offers and other financial junk mail. But if you see mail coming in from unknown banks, investment firms, or other financial institutions—or you discover them hidden away—this can be cause for concern.
These documents may indicate that your spouse has undisclosed accounts or investments that were established without your knowledge.
Similarly, if you discover your spouse has opened a separate post office box or mail drop, it could be a way to keep financial correspondence—like statements, bills, or applications—out of sight.
4. They’re giving money and/or property to friends and family
While giving to others can be generous, it’s also a way to hide assets during divorce. This tactic can take many forms, from “business loans” to gifting valuable items to paying off a debt.
When this happens, the party takes money from your shared marital assets, reducing the amount that could be divided.
It can be a different situation if your soon-to-be ex makes gifts from their individual assets. Those assets (generally) belong to them and aren’t subject to equitable distribution.
5. They’re overpaying credit card bills
Paying off credit card debt is good, but overpaying during divorce can be a red flag. It could be a strategic move if your spouse makes a habit of paying more than what is owed. These overpayments create a financial cushion, allowing your spouse to request refunds for the overpaid amounts or use the excess credit for post-divorce purchases.
Documentation here is key. Keep close track of credit card and bank statements so you and your attorney can track any discrepancies.
6. They’ve made large, extravagant purchases
The general rule during divorce is to avoid making large purchases unless necessary. However, if your soon-to-be ex is unexpectedly investing in jewelry, artwork, collectibles, or expensive hobbies, it may be a sign to ask questions.
These high-value purchases can serve as a way to convert cash—which is easily traceable—into items that are more difficult to value during divorce proceedings. (This could also be a red flag for other concerns, as well, so pay extra attention).
7. You’re noticing new or unusual account activity
Noticing unusual patterns of withdrawals or unexpected purchases from your once-stable checking or savings accounts should trigger your curiosity. It might be time to ask your spouse about the activity and closely track every transaction.
Moreover, it may not be accidental if your spouse has recently opened a separate bank account. Whether they are diverting some of their income or covertly transferring funds from joint bank accounts into this new account, it’s a common way to move money out of the line of direct scrutiny..
8. They’re demanding your signature
Pressure to sign financial documents without explanation or adequate time to review the paperwork is a major red flag. Be especially wary of your spouse requesting Power of Attorney or other documents that would allow them control over your financial decisions.
9. They’re hiding or deleting computer programs or apps
Digital strategies to block your access to financial information include erasing saved passwords from shared devices, deleting financial software, and fabricating a computer crash to explain missing data.
One way to circumvent this is to store your financial records in the cloud or back them up to an external hard drive.
10. They’re suddenly interested in cryptocurrency
When your spouse shows interest in cryptocurrencies, like Bitcoin or other digital currencies, without explanation, there might be more at play than just general curiosity in a new investment.
These could be attempts to move money into less traceable forms, but crypto transactions can actually be traced down to the amount, date, and time.
How to prove your spouse is hiding assets during the divorce process
If you’re concerned about hidden assets—and what they might mean for your divorce settlement—an experienced team can help you understand your options and develop a strong legal strategy that protects your interests.
This typically includes both a divorce attorney and a forensic accountant:
- Your attorney will help gather key documents to compare against your spouse’s claims about their financial situation. They’ll also use legal channels like discovery, interrogatories, and depositions to uncover discrepancies, or subpoenas to compel banks and other financial institutions to turn over records.
- A forensic accountant will analyze your financial records, trace cash flow backward to locate hidden assets, and conduct asset searches to find hidden bank accounts and property across jurisdictions.
Worrying about hidden assets can make the process of divorce even more stressful. If you think your spouse might be hiding money or property, we’re here to help.
At Jacobs Berger, we’ll work with you to understand what your options are and create a legal strategy that protects your financial interests. Reach out to us to schedule a strategy session today.
