Category Archives:Orange County Divorce


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Divorce Help: Could Your Husband be Hiding Assets?

If you’re a woman who needs divorce help, you need to ask yourself those two tough questions:
    1. Could your husband be hiding assets? 
    2. If he is hiding assets, does that mean you won’t get the divorce settlement you deserve?
Hiding assets during a divorce is sneaky, unethical and illegal—yet, it happens all too frequently.  Even in the best of times, it can be extremely difficult to keep track of your financial portfolio (this list might include your marital residence, rental and/or vacation properties, bank and brokerage accounts, retirement and pension plans, stock options, restricted stock, deferred compensation, life insurance with cash value, perhaps a business or professional practice). When a couple decides to divorce, that task can get significantly more complicated.  
Unfortunately, as you go through the divorce process, your husband may try to hide income and/or assets to try to take advantage of the situation.  How can you help ensure you have an accurate accounting of your family finances?
For starters, be on the lookout for certain telltale signs that your husband has some dirty tricks up his sleeve. 
  • Bank and other financial statements are no longer being delivered to your home address. A change in regular delivery could signal that marital assets are being diverted or dissipated.  Check with your bank, credit card companies, etc. to make sure that you receive copies of your statements. You’ll want to start gathering these, as well as tax returns, pension/IRA/401K statements and other financial documents, so that you can keep your own records and be alerted to any unusual activity.
  • A sudden decrease in salary. Any dramatic decrease in salary may indicate that your husband has decided to defer salary and/or hold commissions and bonuses for future distribution.  (That way this income won’t be “on the books” until after the divorce is final.)
  • Intentional overpayments. What happens if your husband overpays the IRS (or other creditors)? He’ll get a refund later –presumably after the divorce is final. I’ve also known cases where people fabricate loans from family members. The idea here is that they can lower their bottom line by listing these debts in their financial statements or sending the family member cash to “pay the loans,” knowing that the family member will return the funds after the divorce. You should also watch for money that might be transferred to your child’s (or his child’s) name.
  • No new clients. But, surprise! New employees. If your husband owns a business, there are many different ways he can “cook the books” in order to make the business appear less valuable than it is.  Maybe he’ll pay employees who don’t exist, or “pay” friends and family who agree to hold the checks until after the divorce is final. He could also delay signing new clients until after the divorce settlement is signed. Remember: The less the business is worth, the less you’ll get.
  • Defensive behavior. A husband who suddenly becomes secretive, controlling or defensive about money could be someone who is diverting or dissipating marital assets. A forensic accountant can help you uncover this type of deceitful activity.
After that, you also need to be fully aware of the most common unethical practices husbands use.  Here is a small sampling of some of the tactics that can come into play.  If your husband wants to undervalue or disguise/hide marital assets he may:
  • Purchase items that could easily be overlooked or undervalued.  Maybe no one will notice that expensive antique/carpet that’s now at his office? Were you wondering why he recently made several significant additions to his coin/stamp/art collection?
  • Stash money in a safe deposit box, somewhere in the house or elsewhere.  Think through your husband’s recent habits and activities. Does anything lead you to believe he is hiding assets in actual cash?
  • Underreport income on tax returns and/or financial statements.  If it’s not reported, it can’t be used in a financial analysis.
  • Overpay the IRS or creditors. If your husband overpays, he can get the refund later, after the divorce is final.
  • Defer salary, delay signing new contracts and/or hold commissions or bonuses. This sneaky trick means this income won’t be “on the books” during the divorce proceedings.
  • Create phony debt.  Your husband can collude with family members and/or friends to establish phony loans or expenses.  Then, he can make payments to the family members or friends, knowing that he’ll get all the money back after the divorce is final.
  • Set up a custodial account in the name of a child, using the child’s social security number.  He could also use his girlfriend’s social security number, in which case it might be difficult to locate the account.
  • Transfer stock.  Your husband may transfer stock/investment accounts into the name of family members, business partners or “dummy” companies.  After the divorce is final, the assets can be transferred back to him.
You may be asking yourself, why would a husband do any of these things? Whatever the reason, hiding assets, income and debt is not only unethical; it’s also illegal and subject to severe penalties IF discovered.
Legal updates brought to you by  Riverside and OC attorneys of Don Ho Law, LLP.
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