The Risks of Hidden Assets for Divorcing Couples

 Posted on July 21, 2015 in Division of Assets

It is common during divorce proceedings for one spouse to be more financially prepared than the other. Oftentimes, the spouse with the higher income starts diverting assets to hidden accounts that will not be declared in the event of a divorce. This asset manipulation benefits the prepared individual, while their partner is left with less than their due. These practices are both unethical and illegal, and affect all types of divorcing couples, from the wealthy to lower-income families.

Most Couples Have Only One Money Manager

Even in marriages where both partners are employed, one individual usually has more control over the finances than the other. Paying bills, managing accounts, investing, and saving is handled by the husband or the wife; not by both partners in tandem. As such, the spouse who manages the accounts and the financial resources has an advantage in the opportunity to manipulate assets.

Methods of Asset Manipulation

There are multiple opportunities for hiding financial assets from a spouse; methods vary on a case by case basis. Some of the most common tactics employed as asset manipulation include tax manipulation, investment manipulation and liquidity diversion.