Beginning the search for undisclosed property

Beginning the search for undisclosed property

| May 19, 2020 | Firm News |

A spouse could have a motive that makes squirreling away money appear perfectly sensible: an extramarital affair, the fear of an unreasonable alimony order or even just open enmity.

Still, Long Island divorcees deserve equitable treatment when dividing their assets. While it might be easy to miss undisclosed marital property when no one is looking for it, some minor investigation can reveal hidden assets in several common places.

  1. Small businesses

According to CNBC, “investing” cash, property or other assets into an LLC may seem like an ideal way to hide money, especially if the spouse has no interest or ownership in the business. Simple company record searches might reveal that an office is only an address instead of an operating business location. Tax returns could help uncover financial transactions that do not correspond to any legitimate practices.

  1. Family and friends

The vast majority of spouses who attempt to hide assets are not financial or forensic geniuses and employ an obvious tactic like gifting or loaning money to friends and family. Sifting through bank statements or capital loss schedules can be a logical place to start looking for sums of cash that appear to vanish.

  1. Income taxes and withholdings

1040 tax filings can point to an unjustifiably increased percentage of income tax deducted from a spouse’s paycheck during a period before filing for divorce. Other payroll tactics can include a false reduction in income, and thus alimony, made possible by increasing contributions to health savings accounts or 401(k) plans.

  1. Cryptocurrency exchanges

Disreputable individuals can usually find a way to exploit advances in products and technologies. The New York Society of Certified Public Accountants reports that cryptocurrency is a trending avenue for anonymously disappearing cash.

Tracing transactions through cryptocurrency exchanges presents significant challenges because no personally identifying information is available without the individual’s private key, and subpoenaing records from international companies is tricky. However, skilled forensic accountants can track almost any hidden marital asset, and computer specialists are continually improving their techniques for uncovering illicit cryptocurrency transactions.