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How to find out if your spouse is hiding assets

On Behalf of | Apr 8, 2020 | Divorce |

When a couple decides to divorce and one person makes significantly more money than the other person, both people worry about their finances. The dependent spouse may worry about paying their bills going forward, especially if they did not work at all. The breadwinner spouse might resent losing their retirement savings and other assets they acquired, especially if they did not choose to divorce or the divorce was a result of the other spouse’s actions. 

This might lead to the breadwinners hiding assets to narrow the financial gap between themselves and their spouses. A narrower gap might allow them to pay less money each month in alimony or part with less when finalizing the divorce. 

Overpaying taxes 

CNBC recommends starting with tax returns. When a spouse plans to divorce or suspects the other partner may decide to divorce them, many may start to prepare several years ahead. The article cites one instance of a retired CPA who stopped filing his taxes for him and wife but made half a million dollars in extra tax payments, which he intended to reclaim by filing his back taxes separately after divorcing his wife. 

Voluntary contributions 

Another way some divorcees attempt to make it seem as if they make less money than they actually do is to make higher contributions to HSAs and 401(k)s that defer taxes. Some may even throw money at a college savings plan, which lists a family member as a beneficiary. To uncover these secrets, experts recommend examining W2s and 1099s and not just the filed tax returns. 

Hiding assets 

Some tax-deferred accounts are transferrable, such as college savings plans. Forbes points out that some divorcees transfer their assets to someone else to hide them. They might then claim the asset got stolen or lost. In some instances, after transferring the asset, they might claim it never even existed or simply say nothing at all. If they say nothing, it might remain a secret. 

Working with accounts or other financial specialists as part of the divorce process might cause many people to uncover disturbing secrets about their partners. It might also help to ensure they get the settlement and alimony payments they deserve for their personal sacrifices throughout the marriage.