Cover Your Assets: How Your Spouse Might be Hiding Theirs

financial infidelity
husband hiding money

If you and your spouse are going through the process of a divorce in court, the judge will try to ensure that all of your shared property is divided fairly or equally, depending on the laws in your state. However unpleasant it is to consider, there is a possibility that your spouse could be concealing some of the marital assets in an attempt to keep more for themselves. 

In this post, we’ll go through some of the most common ways someone might try to hide their assets. The better you know what to look out for, the easier it’ll be to spot the inconsistencies and make sure you get your fair share. 

Related post: How to Find Hidden Assets in a Divorce 

Tricky Transfers

A relatively simple way a divorcing spouse might hide financial assets is by taking money out of a joint account in both of your names or from a brokerage account. They would then transfer that money to an account only in their name. 

Your spouse could also transfer money to a friend, rather than to another account in their name. The idea here is that they would slowly siphon money from your joint account and transfer it into their friend’s account, and their friend would transfer it back to them after your divorce is finalized. Thus, they would not report the property as a marital asset. 

Related post: Why You Need to Work with a Divorce Financial Advisor

Inflated IRS Payments

If your spouse was the one who initiated the divorce proceedings and had been planning on doing so for at least a year, they could have used this plan-ahead method to hide their assets. They would have instructed the IRS to use that year’s refund for next year’s taxes. This way, they would have an overpayment to the IRS once your divorce is finalized. 

Collecting Cash

You know that button that appears on the grocery store check-out screen asking if you’d like cash back? That can be an easy, one-click way for your spouse to hide their assets before your divorce. If they select “yes” every time they go to the store and withdraw $50, for example, they can slowly drain funds from your joint account. The total charge will still show up with the blanket label of “groceries,” so the cash withdrawals go unnoticed. 

Pass on Promotions

You might be thinking, who in their right mind would pass up an opportunity for a promotion? Well, if your spouse is scheming, they might do just that. If your spouse is on particularly friendly terms with their boss, they might confide in them about their upcoming divorce. They could then request that they set aside any raises or bonuses and hold off on offering any promotions until the divorce is finalized. This way, they know they’ll have extra money post-divorce, and neither you nor the court will be any the wiser. 

Postpone Payments

Say your spouse works in sales, and just closed a large deal for their employer. They’re expecting an equally large commission payment; if they’re trying to hide their assets, they could simply ask their employer to hold off on making that payment until after your divorce is finalized. 

The above are only a few ways your spouse might be hiding assets from you during your divorce. There are even more methods they might employ if they own their own business. 

“Forget” About Invoices

If your spouse is a business owner, they could simply delay or “forget” to invoice their clients until after the divorce. Accounts receivable do count as accrued assets, but this might let them keep their real earnings under the radar. 

Exaggerate Expenses

Your spouse could also write up fake expenses for their business, such as paying for imaginary consulting services or adding nonexistent employees to the payroll. This would make their business’ profits appear much lower than is actually the case. 

Indulge in Some Retail Therapy

Your business-owner spouse might start charging vacations and extravagant personal expenses to their company accounts, which would also make their business appear much less profitable than it is. 

There can be some stiff penalties for trying to hide assets during a divorce. They might face monetary sanctions, or be awarded less than what would have been their fair share of the marital property. They can also be ordered to pay you higher amounts in spousal support to make up for the assets they tried to hide. If they used illegal means to hide their assets, such as fraud or theft, they might even face criminal penalties. 

So what can you do to protect yourself and make sure you get your fair share? First off, tune in to your shared finances. This is an excellent preventative measure, as it can help you notice upfront if something doesn’t seem quite right. 

If you are already in the middle of the divorce proceedings and you suspect your spouse of hiding assets, your lawyer can help find them through interrogatories, depositions, and requests for production of documents. A certified divorce financial analyst (CDFA) can also be an important ally in finding hidden assets.

Related post: Contemplating Divorce? 4 Ways a CDFA can Help Reduce Your Stress

In short, there are a variety of ways your spouse may try to hide their assets during a divorce, but there are just as many ways you can keep yourself and your cash safe. 


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