Money has always been a difficult topic between you and your spouse – and that hasn’t improved since you’ve started the divorce process. Now that you’re looking carefully at your records – including your paycheck deposits and account balances — and things aren’t adding up.
Is your spouse hiding income and assets? Maybe. A lack of financial coherence doesn’t necessarily mean that your spouse is (or has been) up to something nefarious. However, New Jersey law requires both spouses to provide accurate financial information so that marital property and debt can be distributed equitably. Unexplained gaps and missing information need to be examined.
Unusual financial activity is the biggest clue
You may have to look back several years to determine if your spouse has been purposely diverting money or other assets into private holdings, especially if you’ve been having marital trouble for some years. Some warning signs are obvious, while others may look like perfectly ordinary transactions – until you look closer.
Potential signs of hidden assets include:
- Unexplained withdrawals or transfers from joint accounts
- Bank or investment statements that stop arriving
- New accounts or credit cards you did not know existed
- Large payments to relatives, friends or unfamiliar businesses
- Sudden claims that a business is losing money
- Income that appears lower than in previous years
- Overpayments to the IRS or other creditors
- Delayed bonuses, commissions or business payments
- Purchases of valuable items, like precious metals, that are easy to resell
- Unusual cash withdrawals or increased use of cash
- Mail sent to a new address or post office box
- Password changes and increased secrecy around their financial records or accounts
Business owners and self-employed spouses may have additional opportunities to hide or disguise income. A spouse in that position might delay sending invoices, pay nonexistent employees, exaggerate their business expenses or leave money inside the company until after the divorce with the idea of reclaiming it later.
Your spouse’s spending habits may also tell a different story from their reported finances. If your spouse claims to earn very little but is taking expensive trips, buying luxury items and otherwise living a high lifestyle, there may be income or assets they’re not disclosing.
Tax returns are useful, but a real exploration of the finances may require assistance from a forensic accountant or other financial professional. Having experienced legal guidance can help you plot a strategy to uncover whatever is being hidden so that the marital assets are divided fairly.