By Alisse C. Camazine
During the divorce process, assets are divided between the two spouses. Unfortunately, one spouse may attempt to circumvent the law by hiding assets, thereby decreasing the other spouse’s share. Often it takes a forensic accountant to find out where the assets are hiding.
Assets can take many forms. They can be invested in a money market, put away in a retirement fund, or it can be property such as cars, houses, land, businesses, art, baseball card collections, frequent flyer points or any number of things. Assets can be hidden in the form of “loans” to a friend or family member or by “losing” significant shares in a business to long time business partners.
Money leaves a paper trail. Withdrawing significant sums of cash on a monthly basis during the time leading up to a divorce is a tell-tale sign of hiding assets. Sophisticated parties, however, can cover their tracks convincingly. That is where a forensic accountant comes in.
Much like the detectives on police shows on television, forensic accountants examine the “scene,” in this case the monetary scene, and find “clues” that will help determine where to find hidden assets. Forensic accountants serve as the primary financial investigator and evaluate various indicators to look for clues. Often the spouse hiding assets will have behavioral indicators, lifestyle issues, business transactions, and other badges of fraud to give them away.
Behavioral indicators of asset hiding include the spouse being secretive about finances, diverting mail to the office instead of the home, paying cash for big items, or refusing to cooperate with accountants and other experts. Assets also may be hidden when patterns of money management have become routine over the years. For example, a spouse that “takes care of all the money” by paying all the bills, providing their spouse with an allowance, keeping separate bank accounts, and maintaining their own business had ample opportunity to hide funds, leaving the other spouse disadvantaged.
Likewise, lifestyle issues are dead giveaways when the spouse’s assets on paper do not match their flashy lifestyle and their big ticket purchases put them far above their proclaimed standard of living.
Forensic accountants are trained to examine complicated tax and business documents to isolate problems. They will analyze things like tax returns, bank records, brokerage account records, credit card records, loan applications, personal financial statements, trust tax returns, estate tax returns, and business records. A trained eye is necessary to scrutinize the mountains of financial paperwork that come along with a sophisticated party determined to hide assets from a divorce proceeding.
If you’re faced with a similar situation to those in this blog, or think you may be the victim of your spouse hiding assets, an experienced divorce attorney like the attorneys at Paule, Camazine & Blumenthal, P.C., can assure you receive your fair share of assets and, if necessary, hire a forensic accountant to assist you in that effort.