During a divorce, one spouse may decide that it is a good idea to attempt hiding assets. Asset hiding happens for a variety of reasons, but the methods often differ.
What are the most common methods of asset hiding to keep an eye out for?
Passive vs. active asset hiding
Forbes talks about some of the assets that a spouse may try to hide passively. Passive asset hiding simply involves refusing to tell a spouse about assets they have forgotten to consider. Common examples include airline mileage and country club membership, or even some types of stocks.
There are other ways to hide assets, too. More aggressive or active forms of asset hiding actually obfuscate the source of certain income streams or attempt to hide already existing money, property and so on.
Lying to hide assets
For example, a business owner may create a fake employee and take the paychecks written to this employee for himself or herself. Another person might pretend to repay debt to a family member or friend but collect the money again after the divorce gets finalized.
Transferring assets
Another common method involves transferring an asset from one form to another. For example, a person might buy expensive but tangible goods like cars, electronics or fine art. They intend to sell or return these items after the divorce, which is why they do not buy things like plane tickets.
Regardless of what method a person uses or their reason for hiding assets, it is still illegal. Anyone who notices red flags that might indicate hidden assets should consider taking action.
