You've decided to divorce and your ex has offered a financial settlement. The offer seems awfully low, but your ex claims it's half of everything the two of you have.
It's possible that you or your ex have made an honest mistake. But it's also possible that your former spouse is hiding assets from you in the hopes of paying you a smaller financial settlement.
If that's the case, your future financial security depends on your willingness and ability to find those assets. Here's where to look:
• Income tax returns: Even people who will lie to a spouse tend to tell the truth to the IRS. (The agency's ability to put people in jail might have something to do with it.) Look at the last five years of returns, searching for inconsistencies in income or the existence of real estate holdings, trusts, or partnerships. None of those things are absolute evidence that a spouse is hiding money, but they are all spots you should investigate further if you find them. The IRS can send you copies of your returns.
• Checking and savings accounts: Request copies of all financial statements during the discovery phase of your divorce. Look for substantial purchases you never knew about, including investments or expensive gifts that weren't for you. Statements from accounts you never knew about are even more revealing. Look at deposits and withdrawals, too. These can also point to hidden spending or assets.
• Credit bureaus: Equifax, Experian, and TransUnion collect and report U.S. consumer credit information. Go to www.annualcreditreport.com to get a free annual report from each of these three agencies. Look for lines of credit or mortgages that don't include you.
• Repayment of a phony debt: A common money-hiding strategy involves "paying back" a fake debt to a friend or relative. Once the divorce settlement is final, the "lender" returns the money.
• Salary paid to a non-existent employee, or to someone else close to your ex, for services never rendered: This involves the same idea as repaying a phony debt, but works best when your spouse owns a business. The husband or wife puts someone on the payroll who doesn't actually do anything and who is willing to return that money when the divorce settlement is final.
• A custodial account set up in your child's name: Sure, your husband or wife could be saving for Junior's braces or college education. Or that account could be a place to stash money now while planning to retrieve it later.
• Expenses paid for a new squeeze, including jewelry, travel, rent, or tuition: Your settlement doesn't get smaller just because your husband's new girlfriend has expensive taste.
• A boss or business partner who's willing to help hide funds: A cooperative boss might hold off on awarding a bonus or promotion until your settlement is final. A business partner could agree to take actions that would make the company worth much more -- a franchise agreement, sale or partial sale, initial public offering, a large deal with a big client -- only after your settlement. Either way, your spouse's assets are undervalued, and you lose.
Some of these tricks are ones you can find yourself if you're patient and detail oriented. Others, particularly those involving your spouse's business dealings, might require a forensic accountant -- a professional trained to spot financial wrongdoing who will typically expect to be paid before settlement.
If you lack the funds to hire a forensic accountant, consider divorce funding. Divorce funding gives qualified spouses lines of credit that help them pay legal costs, expert fees, and living expenses while they work toward a fair divorce settlement. It's an increasingly popular product that can help divorcing spouses find hidden assets, ensuring a more secure financial future for themselves and their children.