Divorce is hard enough when everyone cooperates. But what should you do if you suspect that your spouse may not be playing fair? Some might hide money under the proverbial mattress (or inside an air duct), others may create a fictitious company to funnel funds to – all in an effort to underplay their net worth, give up fewer assets or pay less in children’s expenses.
This is a difficult situation indeed. All you may have in the beginning is a few facts that aren’t adding up, or continuous delays or refusals to provide financial documents. What’s the right course of action? How can you tell whether you are experiencing the normal hurdles of a divorce process, or if something more sinister is at play?
Step 1: Trust your instincts
It is common to second-guess your judgment or feel guilty about raising the suspicion. However, if something just does not look reasonable or right, you owe it to yourself to speak up. The divorce agreement will shape your financial circumstances for years after it is signed. Your chance to get this right is right now.
Red flags will look different for every situation. Perhaps you are noticing that your spouse is selling valuable property for far less than its worth. Maybe credit card and bank statements aren’t showing up in the mail, having been re-routed elsewhere. A change in the level of trust and confidentiality between spouses during the divorce is normal. However, if your circumstances are indicating a dramatic shift, they may be pointing to a potential issue.
Step 2: Get the right professionals involved
Your first line of defense is your attorney. Intentional concealment of funds with intend to cheat the spouse out of a fair property division in a divorce is a punishable offense. Your attorney is your personal advocate who will help you take the right steps to protect yourself.
Next, consider hiring a forensic accountant who can help you investigate your suspicions. Every CPA has some basic training in fraud detection, but when it comes to divorce it may be in your best interest to work with an expert.
When you hire a forensic specialist, you can expect him or her to perform a thorough review of bank statements, tax returns, and other records of financial transactions. He or she will look for evidence of impropriety in a broad range of places, from hidden safety deposit boxes to shell corporations. As a general rule, the more money a divorcing person has and the more complex the family’s financial situation, the more opportunities there are to squirrel away funds. A greater number of red flags and clusters of unexplained transactions are more likely to indicate unfair dealings.
Step 3: Help your forensic accountant
Your forensic accountant is a trained financial investigator. However, your knowledge of your spouse’s habits, risk tolerance and close circle can offer valuable insights. Has your spouse been spending a lot of time on the computer, shutting it off any time someone enters the room? Are you noticing unusual cash withdrawals from your joint bank account? What about loans to family and friends that are out of the ordinary? It may seem trivial to you, yet prove to be a critical piece of the puzzle for the forensic accountant. Don’t just assume that the expert can read your mind. When something does not look right, speak up!
Using a forensics specialist in a divorce
Anyone doing through a divorce has money concerns on their mind. Will I get enough to make ends meet after this is over? What will this process cost me? As you consider hiring a forensics expert, I encourage you to think about your decision as an investment in your financial future. You can manage the expense by staying actively involved in the process, responding to inquiries timely and sharing any information that might be helpful to the investigation. In the end, the forensic process has a chance of helping you get a fair new start after the divorce is finalized – and as such is a worthwhile investment.