Potential clients in the process of divorce often contact me because they are concerned about hidden assets. Often the spouse had a history of financial dishonesty throughout the marriage, or his or her behavior became suspicious around the time divorce was filed. It is not uncommon for there to be a sudden lack of money once divorce is filed. Previously, it was easy to pay the bills and pay for vacations and other extras. Now it’s hard to find money for even the basic necessities.
When a spouse is suspected of hiding money and other assets, professional help is required. But what kind of help?
It depends. There are two types of help that you can get for this aspect of a divorce case. The first is a forensic accountant who will essentially trace money through accounts, follow the paper trail, and determine if there is any missing money. This work is heavily rooted in the documentation you obtain. I can’t trace the money without the documents.
When someone is hiding money, we often find a complex web of accounts with lots of transfers between them and plenty of confusing transactions. Often we end up seeing money that almost vanishes into thin air. There is a transfer to a bank or institution that we knew nothing about, and the trail stops there. (Time for a subpoena so we can see what happened with the money at that bank!)
The forensic accounting work is necessary to unravel these transactions and verify how much money came in, how much money went out, and whether the money going out was legitimate (or was an attempt to hide assets).
The second type of help that may be needed when assets are being hidden in divorce comes from a private investigator with significant experience in the financial world. This type of professional will do what I like to call the “wild goose chase,” digging into the background of your spouse, his or her friends and business associates, and searching for assets that he or she may own around the world.
It is important to understand which of these services you need, or whether you need both. Getting the forensic accountant and the private investigator involved early in the divorce is the best bet. That gives them time to do their work, which can be very involved. You don’t want to run up against trial deadlines when you’re trying to figure out if your spouse has hidden money. It’s better to be able to thoroughly investigate the situation without the danger of running out of time.
