Hidden assets: The dirty secret of divorce

Hawaii uses an equitable distribution system, meaning a fair—but not necessarily equal—division of assets. Unfortunately, spouses may try to hide some of these assets prior to a divorce to keep more from going to their ex-spouse.

It happens more frequently than you may think. According to a National Endowment for Financial Education poll, one in three adults has admitted to hiding or lying about money to their partner.

How assets are hidden before a divorce

Hiding assets can be surprisingly simple to do—especially when one spouse handles the finances, while the other spouse is unaware or uninformed about the details of the family finances. Some of the methods used to hide assets include:

  • Switching accounts: It may be as simple as moving money from a joint account into an individual account.
  • Overpaying the IRS: Some people pay more this year in order to get back more from next year’s taxes, when they are single.
  • Cash backUsing the cash back feature of a debit card transaction could allow your partner to build up a hidden cash reserve.
  • Loan money: This could be accomplished through a straight loan or by transferring money to a friend’s account. After the divorce, the money is returned.
  • Delaying payment: Sometimes business professionals delay their commissions, bonuses or client payments until after the divorce.
  • Fake expenses: When your spouse owns a business, he or she may get creative with expenses to make it appear like the business is struggling. Thus, you receive less.

What can I do?

Get better acquainted with family finances prior to your divorce. Learn where your money is going and keep your eyes wide open. Seek the assistance of a legal professional who can help determine if your soon-to-be ex-spouse has hidden assets. Your attorney can help ensure your accumulated marital estate will be fairly and equitably divided

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