10 Signs Your Spouse is Hiding Assets
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You probably trusted the person you married. But divorce can twist spouses into something unrecognizable. Some people may try to hide assets, particularly liquid assets, like cash in the bank. They may also sell assets that can easily be liquidated for cash, like stocks and bonds or other property.
In Colorado, spouses are entitled to equitable division of marital property, which includes all assets the couple obtained during the marriage. Income, real estate, and retirement savings are all forms of marital property. However, equitable division of marital property is only possible when both spouses are forthright about what they own and how much.
This article explores common tactics people use to hide money and other property. We also offer some tips on how to find out once and for all if your spouse is taking marital assets and how you can make it right if this is happening.
Topics We’ll Explore
Signs Your Spouse is Trying to Hide Assets
What Can I Do if I Suspect My Spouse is Hiding Assets?
How Can I Find Out if My Spouse is Really Hiding Money?
What Colorado Law Says About Reporting Assets During Divorce
What Happens if My Spouse Hides Assets?
What if I Learn About Hidden Assets After the Divorce?
Signs Your Spouse is Trying to Hide Assets
Divorcing couples aren’t always on their best behavior, but you may not expect your spouse to go to great lengths to prevent you from having what is rightfully yours from the marriage. Here’s what to watch out for.
A Financial Control Freak
If your spouse has total control over your financial account information, such as logins and passwords, they may be trying to hide that they’re secretly stowing away money. Check your online accounts. Take notice if your access is now blocked. If you have a joint account, the bank should allow you access.
Avoids Discussion About Finances
If your spouse has become tight-lipped about the finances, they may be trying to hide something from you.
Gives Money to Friends or Family
It’s a red flag if your spouse suddenly has loans to repay to family and friends. This is a tactic some people use to have a pile of cash when the divorce is final. Check your account for suspicious withdrawals.
Sudden Expensive Purchases
Take note if your partner begins to make unusual purchases, especially large ones, using the checking account. He or she may intend to sell the items later and keep the profits, leaving you without your share of the marital cash.
Bank Statements Disappear
If you no longer receive bank statements, there is a chance the address on the account has been changed to hide something nefarious. We’ve seen people do this in an effort to hide that money is being diverted from a joint account to a secret account held only by one spouse.
Complains About a Salary Decrease
Oftentimes a spouse will say they have received a sizable pay cut when, in fact, they haven’t. This lie allows them to set aside money over time so they don’t have to lose some of it to you in the divorce.
Reports Bad Investments
Your spouse may tell you they made some bad investments and lost a considerable amount of money. They may be trying to mislead you so the divorce settlement goes in their favor.
Unusual Business or Tax Practices
Questionable business and tax behavior is a sign of something is wrong. For instance, you notice your spouse has begun to cut a paycheck each month to an employee whose name you don’t recognize. Or, your spouse overstates business expenses on their taxes (this is also tax fraud, by the way).
Erases Computer Programs
A spouse who is up to no good may erase financial programs from the computer, or they may say the computer crashed so they can cover up their underhanded plan.
Demands Your Signature
If your spouse asks for your signature on a financial document, read it thoroughly. If you don’t understand it, don’t sign it. Take it to a lawyer for their review. Your spouse might be trying to trick you into relinquishing some of your assets.
What Can I Do if I Suspect My Spouse is Hiding Assets?
It’s important that you keep your behavior on the up and up. If your spouse is, in fact, hiding assets, it will benefit you in court that you didn’t break the law to uncover the truth. So, with that in mind, here are some (legal) things you can do:
Pay attention to statements and documents that come in the mail – and take notice of ones that stop being delivered.
Monitor joint accounts. Look for large withdrawals or smaller weekly withdrawals that add up to large sums. Also, watch for expensive purchases.
Check joint electronic fund transfer accounts. These systems, like PayPal, can be used to send people money. Money isn’t always transferred to familiar individuals, such as friends and family. Look for names you don’t recognize.
Request copies of all financial records, especially if you’re like many other Coloradans who opt for a do-it-yourself divorce. As you proceed with the divorce, you’ll both be required to report financial information, such as tax records, loan documents, and bank account statements. Divorce can bring out the worst in people; so do not count on your spouse to necessarily be forthright.
Keep a journal of your findings so you can provide them to a lawyer if the time comes.
Get a lawyer if your spouse refuses to turn over documents. They can legally demand them. Also, seek the advice of a divorce attorney if you discover there are hidden assets.
How Can I Find Out if My Spouse is Really Hiding Money?
A Private Investigator Can Help
While a private investigator cannot snoop through your spouse’s financial accounts, they can keep an eye on your spouse’s behavior to uncover their spending habits, who they meet with, and so on.
The investigator’s report can be used to prove misbehavior to the court.
Get a Forensic Accountant
Forensic accountants are experts in tracing hidden assets and uncovering secret financial accounts. If your spouse is suspected of taking marital money, a forensic accountant can review financial documents, like bank statements, to see if money is being funneled from marital accounts.
Forensic accountants are especially useful in high-asset divorces that include overseas dealings. Colorado Family Law with Forms § 5.06 (2023)
What Colorado Law Says About Reporting Assets During Divorce
You and your spouse “owe each other and the court a duty of full and honest disclosure of all facts that materially affect their rights and interests and those of the children involved in the case.” Colorado Rules of Civil Procedure 16.2
This means you and your spouse must fully disclose all your financial information to each other without the other having to ask. So if your spouse fails to include the sailboat he bought, he cannot blame you for not specifically asking about it.
What Happens if My Spouse Hides Assets?
In short, the court can punish them.
The court can actually give you a greater portion of the marital assets if it’s discovered while the divorce is underway that your spouse hid assets.
Your spouse could also be held in contempt of court for hiding assets, which means they could spend some time in jail, owe some hefty finds, or both.
What if I Learn About Hidden Assets After the Divorce?
Sometimes spouses are able to keep their duplicity under wraps during the divorce process. Fortunately, Colorado law gives you five years after the divorce to seek legal relief if you find out your former spouse hid or didn’t disclose certain assets. C.R.C.P. 16.2
If you uncover hidden assets in time, you can ask the court to reopen the property division portion of your divorce. The court will then start from scratch and reallocate the marital assets based on this previously undisclosed information.
Let’s look at a case where one Colorado woman did exactly that.
A Case of Hidden Assets in Colorado
Three years after the couple’s original divorce, the wife learned from discovery documents obtained during a child support modification case that her ex had hidden an asset during the divorce. He had not informed her of the 100 percent ownership interest he held in a Greenwood Village construction company.
The wife asked a Douglas County district court to reopen the property division and allocate her ex’s interest in the company as a marital asset.
Court Awards Wife Her Share
Finding that the husband had indeed failed to disclose a marital asset, the court awarded more than $1 million to the wife for her share of the husband’s ownership interests.
Additionally, because the husband’s deceit necessitated further litigation, the court ordered him to pay more than $62,000 of the wife’s attorney fees.
The husband appealed this decision.
Separation Agreement Does Not Waive Your Rights to Reopen Property Division
During the original proceedings, the wife hired a certified public accountant (CPA) to appraise three specifically named companies, along with “any other businesses operated by” her husband. In re Marriage of Evans, 2021 COA 141, ¶ 26, 504 P.3d 988, 994
Before the business evaluation was complete, the parties signed a separation agreement that awarded the husband three named companies “and any other business operated by the husband during the marriage.” In re Marriage of Evans, 2021 COA 141, ¶ 27, 504 P.3d 988, 995
At appeal, the husband argued that his ex-wife waived her right to reopen the property division when she signed the separation agreement.
The Colorado Court of Appeals struck down this argument, ruling that the wife could not “have knowingly and intelligently waived her right to conduct any further due diligence as to the value of the business” because she had not been given “all the information she was entitled to receive under the rule.” In re Marriage of Evans, 2021 COA 141, ¶ 29, 504 P.3d 988, 995
It’s Up to Your Spouse to Disclose All Assets
The husband had another argument up his sleeve: His ex-wife would “more likely than not” have discovered his ownership in the company if she had continued with her original business evaluation. Therefore, he insisted, it was incumbent on her–not him–to uncover this asset.
The court was not persuaded:
“Wife should not have had to conduct a thorough business evaluation to determine the existence of a marital asset that husband had an affirmative obligation to disclose.” In re Marriage of Evans, 2021 COA 141, ¶ 34, 504 P.3d 988, 996
Hiding Assets is ILLEGAL.
If you have a feeling your spouse is trying to keep assets from you, don’t let that go. Again, you’re entitled to your share of the marital property.
Our compassionate and assertive team of divorce lawyers is ready to help. Call 303-688-0944 to begin your case assessment.
