In high-asset divorce cases, it is probably human nature for spouses to suspect each other of not being completely upfront about assets. This can be the case when one spouse is financially sophisticated and handles the couple’s assets while the other spouse isn’t well-versed in financial affairs.
If the divorce is acrimonious, it can be particularly tempting for an angry spouse to squirrel away funds, a process that may have begun long before the other spouse began to suspect the marriage was in trouble.
Divorce engenders trust issues
For good reason or not, divorce can bring issues of distrust into play. In high-asset divorces, each spouse knows that, unless there is a prenuptial agreement spelling out asset distribution in divorce, a lot of money is on the table. Either spouse stands to win big or lose a disastrous amount of financial support.
There are true-life stories of prince-charming wives who moved out of the palace to scrub floors for a living after their divorce. These days, spouses have a much higher chance of an equitable asset division, thanks to professionals who specialize in protective asset work.
Forensic accountants to the rescue
Anyone anticipating a high-asset divorce should realize that a good divorce attorney will marshal a team of experts in areas of specific expertise. A spouse who is not confident in his or her grasp of marital finances should request a forensic accounting investigation. This is a case where “trust but verify” is never more wisely used. Locate all assets to provide complete records to the court.
A forensic accountant, or CFF, is a specialist who was first a Certified Public Accountant. A CPA performs further intensive study to achieve the CFF distinction. It requires a high-level education to perform financial detective work. For a lengthy marriage, a CFF may analyze a trail of asset movement that can extend back for years. Unraveling financial labyrinths is a special skill. A CFF is good at spotting inconsistencies, even small blips, that suggest a pattern of hidden assets will emerge.
Divorce asset fraud is serious
A spouse thinking of concealing assets should think again. In some states, minimum punishment includes years in prison, charges of perjury, payment of the victimized spouse’s legal bills and—even in no-fault divorce states—the divorce court will award a much higher percentage of assets and even punitive damages to the deceived spouse. It may be a good idea early on for both spouses to meet together with their respective attorneys to discuss the ramifications of asset fraud. Attorneys should mention that there will be forensic accounting teams involved in the divorce; this warning alone could head off problems from a spouse who is not thinking clearly about the severe consequences of hiding assets.