Is your spouse hiding assets from you? If you’re in the process of getting divorced, then one area that is probably lacking is Trust! Honesty about financial information is really important in a divorce, but often times is missing. Full disclosure about all assets and income is extremely important in order to provide an equitable settlement for both parties. Unfortunately, it is all too often that one spouse thinks they can under-report or not report at all financial information.
As you begin the divorce process, it is always recommended you take an inventory of all your assets and liabilities. If you suspect your spouse is hiding financial information, it is important to have evidence of it prior to making an accusation. That is why making copies of all financial statements (e.g., bank, brokerage, retirement) as well as tax returns and pay stubs for both spouses is imperative. Typical methods of hiding assets include transferring to a third party (like a friend or relative), claiming they never existed, claiming they were lost, or offsetting with false debts. If your spouse has been systematically hiding assets over a long period of time, then uncovering them could be difficult. However, a paper or electronic trail, if it exists, can usually provide evidence of wrongdoing.
Tax returns can often provide a lot of information about past income and assets. All income must be reported on a tax return, including W-2 income, private business income, gambling winnings, and capital gains from investments and real estate. Itemized deductions (Schedule A) may show deductions taken for properties unknown to you. Schedule C includes profits and loss from a privately-owned business. Using prior tax returns to reveal unusual patterns of income or expenses can lead to uncovering hidden assets.
Financial statements and tax returns aren’t the only place to look for hidden assets. Missing jewelry, artwork or other collectibles should be noted. Checking a safe deposit box early in the divorce proceedings and inventorying all items is a smart bet. Making an accounting of all assets and income as early as possible in the divorce proceedings is the best way to ensure you are treated equitably.