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Is Your Spouse Hiding Money in Preparation for a Divorce?

Posted by Blake Caulder | Jun 05, 2019 | 0 Comments

Many divorces and separations involve accusations of infidelity. A spouse may have been carrying on a secret affair for years or be caught in trying to meet up with others. This secretive behavior can also extend to finances. When a spouse is carrying on an affair, they may be hiding money to cover-up the money they are spending on another person. A spouse may also be hiding assets in anticipation of a divorce to keep money from the other person.

Where a Spouse is Hiding Money

There are a number of ways to hide assets from another spouse. Especially when one spouse controls the family finances, the other spouse may be totally unaware of the family's financial value. However, a spouse can use sophisticated accounting methods to hide money from even the most financially savvy spouse.

According to a National Endowment for Financial Education (NEFE) survey, over 40% of adults who combine finances with a partner admitted to committing financial deception against their spouse or partner. Some common methods of hiding assets from another spouse when having an affair or considering divorce include:

  • Not telling the spouse about a raise or salary increase,
  • Opening a separate bank account in only one spouse's name,
  • Putting money into the accounts of a family member or secret romantic partner,  
  • Putting valuables in a safety deposit box,
  • Buying valuable artwork, antiques, jewelry, or collectibles,
  • Understating business valuation,
  • Phony debt or expenses,
  • Unreported rent on property,
  • Deferred salary increases or uncollected commissions, or
  • Contributions to hidden benefit plans.

Discovering a Spouse's Hidden Assets

Discovering a spouse's hidden assets can be difficult for a spouse, especially when the secretive spouse goes through extraordinary measures to hide the money. It may take a financial accounting and forensic bookkeeping to look for evidence of hidden assets and identify and value those assets.

Some signs that a spouse may be doing some creative accounting before a divorce may include:

  • Changes in spending habits,
  • Changing passwords and account information for banks, investments, and retirement accounts, and
  • Increasing secrecy about financial matters.

Busted for Hiding Money in a Divorce

Not surprisingly, a divorce judge in North Carolina will not look too kindly upon a spouse who is found to be hiding assets. A judge may sanction the spouse who is hiding money and may be more likely to find in favor of the other spouse when deciding how to fairly distribute property. Other methods of hiding money may also expose the individual to IRS penalties or even criminal fraud penalties.

Equitable Property Distribution in North Carolina

In a North Carolina divorce, property is divided between the spouses under an “equitable distribution” standard. Marital and shared property is generally divided equally between the spouses, or modified in a way that is considered fair to both parties. Each spouse's income is generally included as marital property, to be divided equally upon a divorce.

However, when one spouse believes they should be able to keep more money, needs to fund extramarital activities, or wants to financially punish the other spouse, there are ways to hide assets. If a spouse believes the other is attempting to hide money or is being secretive about financial issues, he or she should consider talking to an experienced North Carolina divorce attorney to discover the hidden assets before signing off on any divorce agreement.

Talk to an Understanding Divorce Lawyer in Shelby   

An experienced North Carolina family law attorney can help protect your financial interests in a separation or divorce. This includes identifying all marital property, discovering hidden assets, and making sure you get what you are owed after a divorce. At Caulder & Valentine Law Firm, PLLC, we have represented spouses in Shelby, Gaston County, and across North Carolina to get their rightful property distribution and alimony support. Contact us today for a consultation.

About the Author

Blake Caulder

I am a North Carolina native who was born in Marion, but grew up in Rutherfordton. While I was truly blessed to be raised in a loving, caring, and stable home, I realized at a young age that not everyone had that opportunity and always had a heart to help my friends who were hurting. Upon graduating high school, I began working with my father who has a real estate office in Bat Cave, North Carolina, while at the same time, attending Gardner-Webb University. I was seeking what direction to go with my career. At the time, the most reasonable thing appeared to be to join my father in his real estate practice. But putting aside the financial aspect and given my passion to help people, I wanted to do something that would allow me take that passion to a whole other level. That's when I found the practice of law. Upon graduating from GWU with a Bachelor of Science degree in Accounting, I was accepted to Elon Law School and was a recipient of a Presidential Scholarship. After completing my first year of law school at Elon, I transferred to Charlotte School of Law to be closer to home and my wife. As an attorney, I genuinely care about each individual client. My first and foremost goal is to help every client achieve the best possible outcome in their case and I strive to make a difference in their lives. I practice in the areas of personal injury, criminal defense, family law, civil litigation, and estate planning. While attending law school, I acquired significant legal experience in multiple practice areas by interning with both the law firm of Tomblin, Farmer and Morris, PLLC and the legal department of Family Dollar. In addition, I defended clients in criminal cases through Charlotte School of Law's Criminal Justice Clinic and provided legal services to individuals who were starting businesses through the school's Entrepreneurship Clinic. When I'm not practicing law, I love being involved in the community, participating in the local prison ministry and community service opportunities. I am very grateful to have a wonderful wife, Daniella, and we were blessed with our first child, Coleman Blake Caulder, in January 2015. Education: Charlotte School of Law J.D., Summa Cum Laude Class Rank – 1 of 328 Order of the Crown CALI Excellence for the Future Awards – Criminal Procedure, Non-Profits, Estate Planning, Civil Rights Pro Bono Honors Full Scholarship Gardner-Webb University B.S. in Accounting, Summa Cum Laude Distinguished Senior Student Award – Highest GPA Alpha Sigma Lambda National Honorary Society Bar Admissions: North Carolina State Bar South Carolina State Bar

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