Even if you believe that you and your spouse can divorce amicably, it's natural to wonder if the outcome will be fair. After all, there are so many things that can go wrong in a divorce. Some people are most concerned about child custody matters. Others know that shared custody is the best outcome, and they're worried about financial stability. Who will get the house? Will this impact retirement? What if your spouse has hidden assets to skew the process in his or her favor?
The more assets you have acquired during your marriage, the greater the overall incentive for your spouse to hide some of them from you and the courts. California is a community property state, which generally means that your assets from marriage are all subject to division. If you don't agree on terms before filing, the courts will usually handle the process. Sadly, if they don't have accurate information, the outcome could be less than fair.
Hidden assets can take on more than one form
When people think of hidden assets, they almost always think of secret offshore bank or investment accounts. While these do exist, they are far from the only means of hiding assets from your spouse prior to divorce. Savvy people may realize that these assets are easier than others to locate and may take more steps to obfuscate their financial trickery.
Developing a stockpile of liquid cash is a popular approach. Making small withdrawals every pay period, for example, is something you wouldn't always notice when reviewing household financial information. That cash can add up over time. Some people even go further, using debit cards at stores and adding on a cash withdrawal to the transaction, which can be harder to find.
Some people hide assets in their personal possessions. If your spouse collects valuable items or has a large amount of art or jewelry, those can be places to hide money from you or the courts. Even if you don't want the items, you should determine if they were gifts or purchases and set a value on them for the asset division process.
How can you uncover potential hidden assets before divorce?
One of the best pieces of advice regarding any financial matter in divorce is to secure copies of all critical financial records prior to filing with the courts. Tax records, payment records and bank statements from the duration of your marriage can all help you review what was coming into your household and how it got spent or allocated.
While going over all of that information on your own may prove difficult, working with a financial professional, such as a forensic accountant, could make the process easier. These experts know exactly what to look for when reviewing your financial records. They can help you find suspicious activity, track down secret bank, investment and retirement accounts and even locate hidden valuable purchases that should get reported to the courts as marital assets.