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How do people hide assets?

On Behalf of | Sep 23, 2022 | Property Division |

When going through a divorce, a spouse may feel tempted to hide assets. They could do so out of genuine financial insecurity, or they might simply feel fueled by spite.

Whatever the case, many people will hide assets in similar ways, which helps tip their partner off that something is amiss.

Passive and active asset hiding

Forbes talks about assets that couples typically forget about. These assets sometimes end up hidden passively by a spouse who refuses to remind their partner about them. Examples can include things like stocks, club memberships or airline mileage.

Outside of this passive form of asset hiding, some partners take a more active approach if they have the means. One popular form of asset hiding involves roping in willing participants. A spouse will pretend to owe someone a debt, but that person is actually in on it. They hold onto this “debt money” until after the divorce and then give it back, sometimes after receiving a reward.

Others may transfer assets from one form to another, usually by using money to purchase expensive, high-end items like cars or fine art. They intend to sell these things after the divorce and get the money back without ever having to divide it.

Red flags to watch for

Generally, a person’s spending habits will change if they attempt to hide assets. They may also seem more paranoid and suspicious about financial matters and could even refuse to share the smallest bit of financial information without an affidavit.

These warning signs should give a spouse plenty of reason to consider looking into their partner’s finances more thoroughly.