Among lawyers, there is an old saying: “Criminal court is bad people on their best behavior, and family court is good people on their worst behavior.”
It may sound like an old cliché, but people are often vindictive during a divorce. Sometimes, they do things simply to harm the other person, even when it doesn’t benefit them to do so. Other times, they create a “win-win” situation for themselves. They find ways to hurt the other person while enriching themselves.
Such is the case with hiding assets. When a spouse is successful at this unscrupulous practice, they give themselves more money after the divorce, and they leave their spouse with less.
Here are some common ways that these bad-faith actors can hide money during their divorce.
- Concealing Large Amounts of Cash
Transactions are easy to trace, but cash is not. When someone knows a divorce is coming, they may start squirreling cash away for themselves. They don’t report this money as part of the marital assets, and it becomes almost impossible for lawyers or courts to find it later.
- Making Extravagant Purchases
Sometimes, a spouse attempts to “hide” assets within physical property. For instance, they could buy expensive watches or jewelry, planning to sell it soon after the divorce. Perhaps the seller is even in on the scam.
This tactic, however, can easily backfire. Remember, anything you buy during a marriage becomes marital property. A court may give this property to the other spouse.
Even keeping this property can come at a cost. In a community property state like Nevada, you usually owe your spouse half the value of anything you keep.
- Interpersonal Loans
Sneaky spouses can give large chunks of money to family and friends under the guise of a “loan.” It’s an easy scam to execute. They simply claim that they are lending their friend money, and the friend will pay them back. In reality, the friend is in on the scheme. They simply hold the money and give it back to the spouse after the divorce.
- Reporting a False Income
In a divorce, you are expected to report your income and savings accurately. It’s usually easy to trace whether this report is false since many employers use direct deposit. Even paper checks leave a trial since they must be deposited somewhere.
If, however, someone works in a cash business, they can report whatever income they choose, and that figure becomes much harder to verify. Other people, such as business owners, can “cook the books” in similar ways.
- Delaying Increases in Income
Sometimes, a spouse knows they have more money coming in, and they don’t want to report it during their divorce. Perhaps they have a big promotion coming, or they are expecting a bonus.
Spouses may work a deal with their employer to receive this money after the divorce is finalized. In that way, they are technically not providing a false record of their income during the divorce.
Your lawyer may be able to counter this scheme by tracking your spouse’s past bonuses. Often, a company raises everyone’s salary or gives them a bonus at the same time. If there is a pattern of rising income that suddenly halts, this could be an indicator of delaying extra money.
- Creating Accounts for Children
Some spouses will go so far as to include their kids. They create custodial accounts in their children’s names. Then, after the divorce, they are free to raid these accounts and keep the money for themselves.
Our firm is aware of all the dirty tactics a spouse can use to hide assets. If you’re concerned about property in your divorce, reach out to us for help. You can contact us online or call us at (702) 904-9898.