“The difference between a divorce and a legal separation is that a legal separation gives a husband time to hide his money.” – Johnny Carson. A funny joke to most, the underlying truth in this statement won’t have you laughing for long if you are the spouse going through this tumultuous event.
Despite how ugly, stressful, painful, and expensive divorce really is, it’s the number one event that causes our phone to ring. We believe that God intended for marriage to be permanent. We believe that the grace of God is sufficient to mend brokenness and change the hearts of spouses toward one another. We hope and pray that every hurting spouse who calls us will seek and find the answers to his or her ailing marriage. We also have learned that in today’s culture, not only will some marriages not be repaired, but separating spouses are overwhelmingly and shamelessly looking out for #1. Oftentimes, one spouse handles all the finances, controls all of the investments, or runs the family business. Sadly, the non-financial spouse may have some idea of what is out there, but wouldn’t know the difference if most of it went missing or unreported. Time and time again, a wife tells us she thought her husband wanted to reconcile the relationship, once, twice, or more times. Our investigation instead reveals that his stalling techniques allowed him to strategically structure the divorce to his advantage. We are here to help, oftentimes as a supplement to your attorney, to ensure that after building a marriage of financial stability, you aren’t taken advantage of financially or sent off with next to nothing.
The topic of this blog is hidden assets. As you’ll see, it applies in more instances than just marriage and divorce. We’ll answer a few basic questions about hidden assets that might open your eyes to a whole new world of dishonesty and illustrate why we offer divorce financial services.
Who would have an interest in hiding assets?
Spouses, family, friends, CEOs. Money has a special power to entice “good people” to make dishonest choices for their own gain. People that you trust might conceal their actual net worth to low-ball negotiations for a business deal, to maximize their share of an inheritance, to increase their share of company profits, to minimize tax liabilities, or to come out ahead in a divorce.
Where and how are assets hidden?
In simple terms, hidden assets are either 1) concealed from personal records using fraudulent documents, or 2) physically relocated or removed from the subject’s property.
- In the instance of fraudulent documents, the subject uses basic computer knowledge and software to manipulate asset statements to show lower values, realizing that they oftentimes go unverified.
- For relocation or removal in its least sophisticated form, liquid assets can be turned into things like:
|
|
|
Those redistributed assets can then be physically hidden:
- With friends
- In a bank security box
- In a rented storage unit
- At work
- In the house
- In the back yard (buried)
Joint account owners can redistribute funds into their own individual accounts that they don’t report, including:
- Life insurance investments, to be collected later
- Retirement accounts
- Trusts
- Individual bank accounts
More sophisticated methods of concealing net worth may involve:
- Secret side ownership of companies and partnerships
- Significant transacting of business in cash, off the books
- Manipulation of the subject’s company financial statements
- Asset ownership in the name of family members or business partners who may be off the radar
- Off-shore bank accounts
- Payments to “ghost” employees to be later collected by subject
As we hope you are concluding from these lists, the options for hiding assets are basically endless, and you are unlikely to be able to obtain or understand all of the information without engaging a forensic accountant or financial investigator. A qualified forensic accountant is someone who should understand how money and property can be traced and located to maximize your chances of discovering well-hidden assets.
When should I look for hidden assets?
Time is of the essence when it comes to locating hidden assets. The longer assets stay hidden, the longer the trail becomes, the harder they become to discover, and the less likely they are to be recoverable. To maximize the benefit, seek divorce financial services early, as soon as divorce becomes a possibility.
Asset searches and financial integrity checks are perhaps the most under-used preventative tool BEFORE marriage, financial investments/partnerships, and death/beneficiary arrangements. Whatever your situation is, you could save yourself a small fortune, besides considerable angst, by making the small investment to get the facts and protect yourself before the situation ever arises.
The possibilities for hidden assets are almost endless, and an experienced, certified financial investigator can pursue, track, and uncover assets that are rightfully yours.
Michael & Jennifer Hathaway
Certified Fraud & Forensic Investigations (CFFI)
Indianapolis, Indiana
