Uncovering hidden assets in divorce
California’s community property law is straightforward. All marital assets are evenly divided, while separate assets remain with the spouse who had them going into the marriage.
However, when it comes to high-asset divorces, it’s not unusual for one spouse to attempt to keep more of the marital assets for themselves. What if you suspect your ex-spouse is hiding assets? How can you find out?
Ways to hide money
For the unethical spouse, there is no shortage of strategies they can employ to hide marital assets. Some of the more common methods include the following:
- Giving money to family and friends as a gift or helping them to “pay off a loan” with the intent of getting the money back after the divorce is finalized
- Creating shell companies and moving assets to an offshore account
- Purchasing luxury items
- Investing in cryptocurrency
- Undervaluing assets
- Deferring raises or bonuses
Looking for hidden marital assets may seem like a lost cause. Fortunately, a forensic accountant can help. They use multiple methods to uncover inconsistencies. A forensic accountant will conduct a thorough analysis of financial records, such as bank statements and investments, to look for unusual transactions or patterns.
They will do a lifestyle analysis to see if expenditures exceed income. Tax returns also provide information such as deductions or a considerable difference in what was reported in previous years.
Hiding assets in a divorce is unethical as well as illegal in California. The guilty spouse may forfeit 100% of the asset’s value if caught. In addition, they will be responsible for the other spouse’s attorney fees and associated court costs. If you are considering a divorce, it’s crucial that you have someone advocating on your behalf. They can help ensure that you receive everything you are entitled to.