How People Can Hide Money in a Divorce
In today’s day and age hiding money and valuable assets away can be very difficult but not completely impossible. There are many ways people can try and hide money from their significant other. When facing a divorce equitable distribution can be an over whelming thought. When it comes to monitoring assets, its important to keep an eye out on your significant other throughout your marriage to ensure you know the full value when going through equitable distribution.
Being aware of actions throughout your marriage even if there isn’t a thought of divorce on your mind is important. If your significant other handles all the money, it’s important to simply be aware of what is going on. Finding out where or how money is hidden can be incredibly difficult and you may not always be able to catch it so the best way to prevent losing out on it in a divorce is to keep an eye out during your marriage. Here are some ways your significant other may be hiding assets so you can prepare yourself if you unfortunately must go through a divorce one day.
One-way people can hide money is via PayPal or other similar services. What they can do is over a long period of time make constant low charges to their account essentially saving funds in their account. The only way to spot this trend is to catch onto the fact that your spouse regularly uses PayPal. If they do you have to determine if they really order things online that much and have charged all the payments through PayPal, or similar services, or if they are just depositing money into the service. PayPal is one of the easier ways to find if they are hiding money in an account because there is a good online paper trail between accounts.
Bitcoin and other cryptocurrencies are another relatively new way to hide money. With this currency there are no physical places and companies to get records from. Since many of these online currencies are mostly just compiled and stored data within either online services or home computers it is much harder to trace where these currencies are and how much of a value they really hold. There are no central locations for these services and many of these transactions occur on virtual exchange websites such as coinbase.com. Since these values also fluctuate regularly the best way to track these values are to back into the situation. Instead of trying to access the currencies and accounts themselves the best way to determine their values is to look at where the payments are coming from such as PayPal and other bank accounts.
Another way to hide money is through the IRS. You may be thinking it is not possible to hide money in an agency that sets out to find people hiding money, but it can be done. This is typically done by someone who is a business owner because they don’t have money drawn from a paycheck, they voluntarily make payments throughout the year. What they can do is overpay their estimated payments. They overpay them planning to get a divorce and then file extensions for their tax return again and again. Then after the divorce is finalized, they will file their taxes and get a return of their over payments.
Getting paid through credit cards is another way to hide money. What is done with this method is a company pays an employee a lower salary than what they would typically be paid and then they report that as income to the IRS. What they then can do to hide extra income is the employee will use a credit card to pay for things and the company will make payments on that card for the employee essentially acting as income for the employee.
Another way of hiding money is with antiques. People can hide money in the value of artwork, hobby equipment, and other collectible items. If they aren’t all big-ticket items you may hardly even notice your spouse collecting them, or they may even be buying these collectibles and keeping them somewhere out of the house like in their office. The value of these collectibles may not seem like much at the time of purchase but after an extended period the value of antique collectibles can build.
Deferred compensation is yet another way people can try to hide money in a divorce. This is almost a sort of collusion between people to hide money. An example of this could be, you have an employee whose good friends with his employer. Then the employee asks the employer to hold off paying them their just compensation from working. This could be through things like holding onto commissions for an extended period, bonuses, or waiting to give them a promotion that comes with a big pay increase. The best way to detect this is by knowing how your spouse makes money and if you see a constant steady decrease in earnings but work isn’t slowing for them that should raise a red flag.
Now this is not meant to coach you in how to hide assets from a spouse, it is quite the opposite. This is to teach you what to look out for and how to spot money that is being hidden away from not only you but from your spouse’s records as well, as once it is hidden it can be hard to uncover or expensive to do so. The best way to avoid having your spouse hide money from you during a divorce is to keep an eye out for red flags. And if you are going through a divorce you will be able to know what to look for to make sure all their value is on the table during equitable distribution. Contact The Law Offices of Michael Kuldiner, P.C. to make sure you are doing the correct thing and your spouse is held accountable in a divorce.