It is not an unusual occurrence for a business-owning spouse to attempt to hide assets. There are many reasons why this may be true, but during a divorce case, it is imperative for all assets between both spouses to be apparent. Hiding assets is fraudulent. This has always been a problem, but a good attorney can help identify this behavior to ensure you get a fair share of what is owed to you. Let’s look at some FAQ on forensic accounting.
How Assets are Hidden
There are many different ways that assets can be hidden. Some examples can include:
- Spending exorbitant amounts of money on unnecessary equipment or supplies
- Paying beyond market value for inventory
- Buying homes or other large items for personal use
There are many ways to get to the root of a hidden asset scheme. The following questions are good places to start uncovering the truth. These six questions are a more comprehensive way to uncover this problem. Trying to provide a list of all the schemes that have been used would be too time-consuming. Usually, these questions can help you get the information you need.
1. Is your spouse underreporting income, or are they reporting odd amounts of business spending? This is usually one of the first signs that something is amiss. It pays to always be on the lookout for odd financial behavior if your spouse owns a business that you are not a direct partner of.
2. Is there an extramarital relationship that is absorbing resources? Hiding assets usually goes hand in hand with infidelity. Even if it is not sexual infidelity, relationships or friendships will often benefit from the extra resources, and this information is kept secret from the spouse.
3. Is there an increased pattern of spending directly after a separation? Often this technique is used in an attempt to depress the value of marital assets. This is a direct attempt to cut into what the other spouse would be owed in a divorce.
4. Does it appear that family members are attempting to work with the spouse to hide assets? A business-owning spouse will often work with other family members to hide assets before a divorce.
5. Is there intellectual property the spouse will not openly admit valuation of? Intellectual property and patents can easily be hidden, which can dramatically affect what will be owed to the non-business-owning spouse in a divorce.
6. Have all stock options and other investments been properly valued and disclosed? If you notice important valuations for these types of assets missing from documents, it is worth digging deeper to make sure all assets are being disclosed openly.
These are good questions to ask a forensic accountant if you think assets are being hidden.