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3 ways that people hide money before divorce

On Behalf of | Aug 2, 2018 | Firm News

During divorce, you and your spouse need to disclose all of your assets. Regardless of where they are physically located or who owns them, you must disclose them.

However, people sometimes attempt to hide money away before divorce. They then claim they do not have it when the marriage ends. This keeps their spouse from getting a percentage of that money.

For instance, if you and your spouse had $1 million in assets and it got split evenly, you would both end up with $500,000. If your spouse had another $500,000 stashed away that you did not know about, however, he or she comes out of the divorce with an even $1 million, essentially stealing $250,000 from you. Of course, the exact numbers may be far smaller or larger, depending on the case, but the same principle remains.

To find these hidden assets during the case, you can start by learning how people tend to hide money. If your spouse was planning to ask for a divorce for a while, he or she could have been doing this for years. Below are three examples:

1. Getting a separate bank account

For many people, the first step is to open a new bank account. Married couples often use joint accounts, but that does not stop your spouse from opening another one in his or her own name. In many cases, these accounts can get set up without sending paperwork to your home, and your spouse can then use direct deposit or other online services — like taking pictures of checks to deposit them — to move money into that account.

2. Getting cash back

After your spouse sets up the new account, he or she may start getting cash back with standard purchases. If you look at the statements, you just see $200 for groceries. However, it was really $160 for groceries and $40 in cash back. Your spouse then sets the money aside, hiding it in the new account. Over time, hundreds or even thousands of dollars slowly shift over to that account.

3. Rerouting new income

You may know how much your spouse earns, but do you really look at those pay stubs? If your spouse gets a raise at work, he or she can then divide every paycheck, sending the normal amount to your joint account and rerouting the money from the raise to the new account. You do not notice any drop in income, he or she never mentions the raise, and money that you never knew you had starts disappearing.

Your options

If you do think that your spouse is hiding assets from you, it is very important to know all of the legal options you have during a divorce.