Pennsylvania residents who are going through a divorce may suspect that their spouse is trying to hide assets. A few red flags that indicate this may be happening include concealing details of financial transactions, unusual withdrawals from bank accounts and rerouting of mail. It may be necessary to hire a forensic accountant in order to detect this financial fraud.
A common form of financial fraud in divorce is dissipation. This means the spouse destroys property or wastes money. It can mean literally destroying personal property or excessive spending, but it can also include allowing a residence to fall into foreclosure, gambling and spending money on extramarital relationships.
In some cases, a spouse may transfer assets to family and friends, sometimes roping in innocent people by claiming that it is the other spouse who is attempting to commit fraud. Other times, the methods of hiding assets can be sophisticated and difficult to find. They include hidden safe deposit boxes, unfunded trusts and shell corporations. People might also fail to disclose various types of compensation such as bonuses or stock options.
Divorce can be financially complicated even if one spouse does not suspect the other of hiding assets. Early in the process or even before initiating a conversation about a divorce with their spouse, an individual may want to sit down and review the family's financial situation. This should include having an understanding of income for both spouses, outgoings, debts and assets. People may find that they have to shoulder a larger financial burden during and after a divorce in the form of making rent or mortgage payments on their own plus utilities and possibly support. By sitting down with an attorney and getting a realistic picture of the financial situation early on, a divorcing client may be able to better prepare for the property division process.