Uncovering hidden assets in a Minnesota divorce
It is possible for a spouse to try to conceal assets in an effort to prevent them from getting divided during a divorce.
In accordance with the law, spouses in Minnesota and across the country are required to disclose financial information prior to dividing property in a divorce. However, as CNBC reports, a survey from the National Endowment for Financial Education found that 35 percent of participants noted that they had experienced deception when it comes to a combined accounts. That dishonesty includes misleading someone about debts or financial earnings.
In order to reach fair and equitable property division, it is essential for a spouse to uncover any hidden assets. Several tactics can help people get an accurate picture of their financial situation.
The signs that something is missing
In most cases, a spouse will try to hide an asset in order to protect it from getting split in the divorce. Forbes magazine reports that there are several cues that deception is taking place, such as the following:
- The spouse’s salary is suddenly lower, indicating a portion has been deferred.
- A business owned by one spouse takes on new employees but not new clients to make the company appear less valuable.
- Statements on bank and retirement funds are no longer delivered to one spouse because the other is attempting to hide something.
- A spouse starts intentionally overpaying creditors or the IRS.
In some cases, people simply sense that something devious is afoot when their spouses start acting secretive or defensive about accounts.
Where to look
As the Association of Divorce Financial Planners points out, it can be a complex and frustrating process to locate hidden assets. In some situations, a spouse may try to falsify documents to misrepresent how the true value of accounts or a business. It is also possible that a third party may be holding the assets for a spouse until after the divorce is final. This could be achieved either through sneaking money to someone else or through spouses claiming they owe a debt to family or friends.
Forbes magazine also points out that some spouses will create bank accounts in someone else’s name in order to hide cash. A custodial account using a child’s Social Security number, for example, would enable someone to stow away money. A spouse could also use a friend’s information to create an account and deposit cash.
How to resolve it
Experts recommend working with a forensic accountant or investigator to locate hidden assets. The ADFP reports that the professional will need contact information for the spouse suspected of foul play, which includes the full legal name, nicknames, recent addresses. Even the names and vital information of the spouse’s close friends or family may lead to hidden property.
The investigator will be able to review tax returns, account statements and a business’ cash flow, among other items, to determine if and where assets have been stashed.
Anyone who suspects a spouse is concealing assets should work with an attorney.