We all know how difficult the divorce process is. In addition to feelings of loss and sadness, the legal process of divorce can be overwhelming and burdensome. But when your spouse is hiding money, or if you suspect it, it takes things to another level.
It’s bad enough that you have to walk away from this marriage with only half of the assets, and potentially much lower monthly income than before. But then add to that a dishonest spouse hiding money and doing things to make sure you get even less of what you’re legally entitled to.
If you suspect your spouse is hiding money, look for red flags
When people are getting divorced, the often disagree on lots of things. Money is a frequent hot topic during the marriage, and it is a central argument in the divorce process. One party is often suspicious of the spouse, especially if the spouse had most or all of the control over the money. But how do you know if your suspicions are wild speculation or if they could really mean that something is wrong?
Forensic accountants look for red flags of financial fraud. These red flags are signs that something is wrong. They go beyond just a gut feel. We look for specific things that you can pinpoint. There are lots of potential red flags, but here are a few that might seem familiar to you:
1. Hidden or Altered Documents.
Has your spouse refused to let you see bank statements, loan statements, or other financial documents? Does it seem that documents have been altered, such as a missing date? Or has your signature been forged by your spouse? Hidden documents are especially important if you previously had free access to the documents. Why is your spouse now denying you access?
2. Secretive Behavior.
Is your spouse acting suspiciously? Is this a change from his or her normal behavior? Maybe he or she has time that is unaccounted for, or his hiding his or her phone, or is trying to hide spending.
3. Change in Spending Habits.
Maybe your spouse is suddenly making larger purchases without talking to you first. This is especially concerning if you used to discuss larger purchases before they were made. Or maybe your spouse never got into technology or electronics, and has suddenly bought a new tablet or a fancy phone.
Red flags of fraud are not proof that fraud has occurred or that your spouse is hiding money. They’re just warning signs. In order to prove fraud, you’ll need to take the next step to find documents that show exactly what your spouse has done with the money.
What Can You Do?
If you see a number of concerning warning signs of your spouse hiding money in your marriage, it is time to take a look at your finances. You are especially at risk if you haven’t been actively involved in managing your family’s money. There are all sorts of things that could have happened to your money, and you need to know what is going on sooner rather than later.
If there is a lot of money at stake or if your spouse is engaged in a complicated fraud scheme, you may need a forensic accountant to do a fraud investigation. A forensic accountant can look at the money that went in and out of your accounts for the last several years and tell you exactly what your family’s money was spent on.
If a forensic accountant is not affordable for you, the Divorce Money Guide may be a better option. It is a ten-step online handbook created by a forensic accountant to help guide you through gathering your financial documents and looking for evidence of financial fraud.
The Divorce Money Guide will walk you through the “financial discovery” part of your divorce, what financial documents you will need, how to get those documents, how to organize them, and what to do with them to look for evidence of fraud. You don’t have to be “good with numbers” to complete the guide, because there are very simple instructions that can help you find evidence of hidden or wasted money.
Maybe you don’t think that you could complete ten steps of a financial guide. But if you can even get through one or two of the steps, you will know more about your money than you did before you started. Each step you can complete is progress toward becoming more informed about what happened to your money.
If you see warning signs of financial fraud in your marriage, you owe it to yourself to look into what has been going on with the money. The more suspicious behaviors and warning signs you see, the more likely your spouse is hiding money. Once you see the red flags, you’ll need to find the proof of exactly what is going on.
And the more you know about the money, the better off you will be as you try to finalize your divorce. You want to have all the information about the money before you agree to anything.
Like this article? Check out: “8 Money Management Tips for After the Divorce”
Tracy Coenen, CPA, CFF, is a nationally recognized CPA and forensic accountant, who focuses on finding hidden money in divorce cases. A solo practitioner for over two decades, Coenen also works in the areas of fraud investigation and corporate litigation. Coenen is the creator and founder of the Divorce Money Guide, a 10-step handbook for men and women getting divorced aimed to help determine if a spouse is hiding money. She is also the creator of the Post-Divorce Money Guide, a 10-step handbook in managing your money after divorce, and the Marriage Money Guide, a tool to help you manage your money before walking down the aisle.