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What can you do if you worry your spouse may be hiding money?

Sometimes people hide smaller amounts of “emergency” money, “just in case”. Unfortunately for some, what begins as innocent can get out of hand and the wrong turn of events in a marriage can lead to the theft and wasting of marital money, often in a spiteful and devious manner.

Do you know anyone from whom a spouse hid money, much of which was never found when the couple was divorced? The diversion and waste of marital community property and assets has been an issue in many marriages so long as there has been something to hide and a reason to hide it. Sometimes people hide smaller amounts of “emergency” money, “just in case.” Unfortunately for some, what begins as innocent can get out of hand and the wrong turn of events in a marriage can lead to the theft and wasting of marital money, often in a spiteful and devious manner.

Hypothetical: Wife receives a summons and divorce petition from her husband of 24 years. When the couple’s attorneys exchange financial disclosures in the pretrial discovery, wife is concerned that husband’s list of individual and marital assets is worth far less than wife expected. Wife and her attorney conduct a forensic investigation into the wasting of marital assets. Some missing assets and accounts are discovered but wife believes it is only a fraction of missing funds.

Where did the money go? Was it ever there in the first place?

In this hypothetical based on a true story, the husband controlled most of the finances outside of the shared checking, savings and credit cards shared by both husband and wife. Certain records of investments were addressed to the husband’s business address. Husband told the wife and a few friends about great investment opportunities and how well they were performing. Later in the divorce, husband tells the wife that there was not as much money in the investments as he let her believe because he wanted her to think he was more financially successful than he really was.

It is much easier for the wife to believe that her husband lied about all the investment success than to realize that the money was being slowly and systematically withdrawn and hidden without a chance of discovery. The husband in this case had researched how to hide money from his wife many years earlier when he also decided to wait until all the children reached adulthood and would file for divorce and pay the wife a lump sum for spousal maintenance and her equitable share of the community marital property.

The best way to prevent financial fraud in a marriage is to share in wealth preservation roles.

Both spouses need not be on equal financial literacy footing to take an active role in knowing where the assets and income are, how they are being managed and what assets and liabilities are there. Most sensible spouses will be open to the other’s concerns about wealth preservation. Posing your concern about money is as easy as saying, “I read an article about estate planning, insurance and investments and I want to have a better understanding of where we sit financially, now and into the future.”

When you take an annual snapshot of income, assets and liabilities it is easier to protect a family’s financial security and goals. The assumption is that your spouse is going to be honest and not give you only 80 percent of the financial truth. If something does not seem right, you may be able to conduct your own independent financial investigation using a forensic accounting or similar professional, all without your spouse knowing. If you do this, however, you could be putting your marriage in peril by creating a situation that was not there in the first place.

Red flags to be aware of when keeping an eye on income and assets:

  • Large and frequent cash withdrawals and no accounting for how the cash was spent;
  • Post office boxes and other addresses appearing on financial documentation;
  • The purchase and sale of items and property that can easily be sold for untraceable cash;
  • In divorce, generous appearing lump sum settlement offers that cut off future contact;
  • Excuses for financial mistakes or failures that might be a diversion of actual diversion of money.

If you want to learn more about how to protect your financial interests in your marriage, and whether you are happily married and want to stay that way, or are contemplating or facing divorce, you may make an appointment for a confidential consultation at Scroggins Law Group, to learn your rights and know where you stand.

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