The breakdown of a marriage can result from many different causes. But a common thread in divorce is the loss of trust by one or both spouses.
When mistrust creeps into any relationship, it’s not an uncommon feeling to believe your partner may be hiding marital assets that you are entitled to share.
4 frequent hiding spots
It’s in your best interest that all assets are on the table during the divorce process. So, it’s essential to understand that people typically hide assets in these four ways:
- Creating false debt
- Claiming the asset was lost
- Transferring assets to third parties
- Denying that the asset exists
Scouring tax forms can raise red flags
Looking at old tax returns is one way that hidden assets are uncovered. These tax forms can lead to the discovery of undisclosed property. For instance:
- Itemized deductions: Schedule A lists income that may not be revealed elsewhere, such as property tax deductions for hidden real estate.
- Dividends and interest: Schedule B identifies any accounts that generate revenue, such as interest or dividends. Use this list to locate new or undisclosed assets.
- Business profits or losses: Schedule C can include a depreciation schedule, which can identify assets purchased by undisclosed business properties.
- Capital gains and losses: Schedule D can also reveal new assets or those that have disappeared, such as stocks, bonds and real estate.
- Supplemental income or losses: Schedule E reports losses or gains from partnerships, rental properties and S corporations, which can all lead to hidden assets.
Take inventory before starting the process
Divorce can be an emotionally draining experience, but it’s in your best interest to also consider it as the end of a business relationship. Before starting the process, make a comprehensive list of all assets in your spouse’s name, your name or both. Taking inventory sooner rather than later can help reduce the risk of your hard-earned assets disappearing.
