Financial infidelity: When people hide money
For many, hiding bank accounts is worse than cheating. Certainly, the violation of trust involved with hiding money is on par with physical cheating for a significant number of people.
A new study says that some 15 million people are hiding money in the form of credit cards, checking accounts or savings from their partner. Over 30 percent of respondents believed financial infidelity was worse than physical cheating. 31 percent of Millennials (those born after 1982) have admitted to having a secret account, while 24 percent of Generation X (mid-1960s to mid-1980s) and 17 percent of Baby Boomers (mid-1940s to mid-1960s) say they hide assets. Hiding money during a relationship or marriage is one thing, but hiding assets during a divorce is another. It’s illegal.
Sneaky, unethical and illegal
It happens more frequently than most might expect, but people also hide money during divorces. The reasons are many: The spouse is getting revenge for infidelity or some other issue. Perhaps, they fear not getting enough money in the divorce. Maybe the spouse simply feels they deserve that money. But hiding assets during divorce is wrong. The consequences of getting caught can vary from state to state and case to case. If a spouse is found to be hiding assets, the judge has a number of remedies at his or her discretion:
- Jail time
- Requiring him or her to pay the other’s attorney fees
- Awarding the entirety of the hidden assets to the spouse
Warning signs of financial infidelity
Hiding money can be surprisingly easy to do, but there are signs. Watch for these red flags:
- Change of address: A tipoff to possible asset hiding could be when your financial statements are no longer being mailed to your home.
- Overpayments: Your spouse might be paying more this year to save on next year’s taxes or looking to get a refund after the divorce.
- Changes in compensation: Your spouse may defer commissions, bonuses and salary until after the divorce.
- Business expenses: When your spouse owns a business, they can get creative with expenses to make it appear like the company is struggling. From their point of view, the less the business is worth, the less you will get in the divorce.
- Loans to friends: Your spouse makes a loan or transfers money to a friend’s account. The money will be returned after the divorce.
- Defensive behavior: If your spouse is suddenly defensive, secretive and controlling when it comes to finances, this is a significant red flag.
If you believe your spouse is hiding money
When you suspect your spouse may be hiding money, you might begin by asking yourself why? If there isn’t a divorce on the horizon, having a frank discussion on family finances is in order. If divorce is on the table, your attorney can help. Experienced counsel will often conduct a lifestyle analysis to understand the true picture of your standard of living during marriage. From this, they can determine if discrepancies are pointing to hidden assets.
The bottom line of financial infidelity is broken trust. When it happens to you, it may be wise to stop trusting your spouse’s words and start trusting their actions.