The saying goes, “Money is the root of all evil.” That may or may not be true, but it can make people do unethical things.
You may not want to believe that your ex-spouse is hiding money, but the thought of leaving you with less and them with more may be too tempting to resist.
Ways to hide money
California is a community property state, meaning all marital assets are divided equally. For an unscrupulous spouse, there is the realization that by depleting those assets, there will be less to divide, leaving the other party with only a portion of what they are owed.
Unfortunately, it can be relatively easy to hide those assets. Some of the more common ways to do that include the following:
- Giving money to a family member as a “gift” or to “pay off a loan” to get the money back after the divorce is finalized.
- Deferring bonuses or pay raises
- Withdrawing money from joint accounts and placing it in an offshore account
- Buying expensive jewelry, vehicles and artwork they can sell after the divorce
- Establishing a custodial account for children and transferring money to it
- Underreporting income
- Investing in cryptocurrencies
Fortunately, forensic accountants are very knowledgeable and have the expertise to find hidden assets. One of their primary methods is lifestyle analysis. This involves looking at the spouse’s standard of living and comparing it to the income and expenses presented in court. The forensic accountant can review credit card and bank statements and other financial documents to identify inconsistencies that suggest undisclosed assets.
A forensic accountant will also follow the money. In other words, they will examine transfers between accounts, cash withdrawals and other unusual activity that indicates a money trail from its source to its current location. They can also analyze tax documents for discrepancies and uncover hidden assets, such as undervalued luxury goods and real estate.
If you are going through a high-asset divorce, you may consider hiring a forensic accountant. They can work with you and others on your team to ensure you receive all of the assets you’re entitled to receive.