Is Your Ex Hiding Money?

Be prepared to look overseas – divorced men and woman sometimes try to park money overseas in secure, private accounts outside of the prying clutches of the Internal Revenue Service. “Offshore funds are very difficult to find,” says Jeffrey Leving, founder of DadsRights.com. “Even a good lawyer may not help here – I’d hire a detective who specializes in financial fraud.”  

You might need to get the courts involved, as well. “Sometimes you need to go before a judge and get permission to get access to bank or brokerage records,” Fitzgerald explains. “Then we go in and see what is there and what is deleted. In most cases, all data on computers, like e-mails or text messages, or web sites or credit card transactions, stay there for years. It's a treasure trove for us.”

What can a good divorce lawyer do with hidden financial information that suddenly pops up? In a word – use it as leverage. The attorney is now armed with evidence that the ex-spouse is hiding money, which is never good in the eyes of the law, says Fitzgerald. “We had one case where a spouse was his financial books, and he had created a dummy account. We found it, and the attorney used that as a hammer, telling the spouse that he would contact the Internal Revenue Service if he didn’t play ball. It’s a powerful weapon.”

RED FLAGS
If you suspect that your spouse is involved in some financial shenanigans, or if you notice that your asset values are too low or the checking account doesn’t square, don’t panic and don’t confront him just yet. Instead take the following steps:

1. Get the last three to five years of joint tax returns. If you can’t locate them, call the Internal Revenue Service at 800-829-3676, and ask them to send Form 4506. For $23 they’ll send you a copy of each return.   

2. Check any safe deposit boxes you have in both of your names and record the contents.  

3.  Make copies of the past year's worth of bank statements, brokerage accounts and other investments.   

4.  Scrutinize all credit card statements from the last year.