Is your spouse overpaying taxes? Putting money in a brokerage account but not withdrawing it? Transferring money across different checking accounts?
This behavior might be suspicious, and those suspicions might be that your spouse is making plans for a divorce.
Salting away the cash
Part of a divorce is a full and fair accounting of both spouses’ financial resources. If you think your spouse is putting away cash to keep it from you during a divorce, the 1040 tax form is a good place to start an investigation, one expert says.
One trick discovered by an accountant was when a spouse made payments toward taxes but didn’t file tax returns for two years. The plan: Overpay tax bills by $500,000 from a brokerage account without filing a return, then file for back taxes after the divorce and get the money in tax refunds.
Another tactic is to put more pre-tax money into 401(k) plans, deferred compensation or health saving account to reduce take-home pay, thus reducing the amount of court-ordered alimony and child support.
Keeping an eye on Schedule B filings on interest and dividends, Schedule D filings on capital gains and losses, and Form 1099-R which shows distributions from retirement accounts can all produce red flags of someone looking to hide money.
The entrepreneurial spirit
One way to fool unwary spouses is to form a business in another state with a name identical to one formed in your state, then funnel money to the new business.
Or, like one soon-to-be ex, buy identical presents for wife and mistress at the same time so there will only be one entry on the charge card statement.
One woman took out cash each time she went to the grocery store and then put the money – eventually about $30,000 – into a safety deposit box.
But no matter what the financial scenario might be, finding a qualified, experienced attorney to help you through your divorce is a good idea no matter how much money you and your spouse might have.
