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Some of the most complex cases we handle at our firm, Wisselman Harounian & Associates, involve “premeditated divorce planning.” These are cases where one spouse undermines his or her unsuspecting partner by hiding away assets for months and even years before the proceedings start.  Usually, this individual has more control over the income and assets of the family and is the main financial decision maker, whereas, the unsuspecting spouse is “in the dark” about the party’s financial circumstances.

Once the parties start meeting with lawyers to move forward with the divorce proceeding, it becomes apparent that there are assets missing, bank accounts emptied, or lines of credit taken out without prior knowledge or consent.  It can take the lawyer months of investigation, subpoenas, and restraining orders, not to mention tens of thousands of dollars in legal and expert fees to trace and track down missing assets. In high net worth cases, it is imperative to have a cohesive strategy to locate missing funds, which may include hiring a forensic accountant and investigator.  Sometimes, it is necessary to investigate assets that are located out of state or out of the country.

Here are some of the obvious places to look:

Delayed bonuses, stock options, or raises: If your spouse gets or is entitled to these before the divorce, that extra money will be included in the marital estate, which he or she might have to split with you.

Unreported income: If your spouse is involved in any type of cash enterprise, or closely held business, he or she may be able to pocket the cash without reporting it on his tax returns and financial statements, which means you might never even know it exists. 

Custodial or Trust account: Your spouse may try to hide cash by setting up a custodial account in the name of a child, using the child’s social security number. Or he or she may open up a trust account to move assets out of the marital estate. Even if there is no divorce on the horizon, do not ever sign any trust documents without consulting with a lawyer.

Debt repayment: A shady spouse will sometimes pay a phony debt to a friend, with the pre-arrangement that the friend will hold the money until after the divorce and then return it.

Salary paid to a nonexistent employee: If your spouse owns a business, he or she may funnel assets in the form of salary to a fake employee. To get the cash back after the divorce, all he or she has to do is void the checks.

Expenses paid for a paramour: This includes such things as gifts, travel, jewelry, rent or a car.

Investment in bonds with no interest: This includes municipal bonds or Series EE Savings Bonds for which no interest is reported on tax returns. If it isn’t reported, you may not realize it exists.

ATM withdrawals and wire transfers for small amounts: These can go undetected for years.

If you think your spouse is taking steps to undermine your financial and legal interests, it would be beneficial for you to seek a consultation without delay to discuss how you may protect yourself.

 By Jerome A. Wisselman, Esq.
Wisselman, Harounian & Associates, P.C., a Matrimonial &
Family Law Firm