Frequently we are asked what recourse is available when one spouse attempts to hide assets of the marital estate during a divorce. Not only is such conduct highly unethical, it is fraudulent as well. Typically a forensic accountant is called in to help search for hidden assets. In our experiences, here are some reoccurring methods used to hide assets:
- Purchasing lavish antiques, artwork or hobby equipment. Often times property such as this is overlooked and undervalued;
- Collusion with an employer to delay the payment of bonuses, stock options or raises;
- Setting up a custodial account in the name of a child;
- Repaying a "debt" to a family member or friend when such payments were no previously made;
- Salary paid to a non-existent employee if the spouse is a business owner;
- Money paid to close friends or family members for "business" services not actually rendered; and
- Investment in municipal bonds or Series EE Savings Bonds for which no interest is reported on tax returns.
If you suspect you spouse is hiding assets it is a good idea to review all financial records prior to filing for divorce. If you are responding to a divorce we suggest you retain the services of a qualified forensic accountant.