Divorce is a minefield. Take years of misunderstandings and emotional hurts, throw in financial uncertainty and a sense of betrayal, and you get a recipe for explosive disaster. Every couple manages the process differently: over the years, I have seen everything from civil conversations about difficult questions to all-out-brawls.
Occasionally, individuals going through divorce take a more subtle approach to get their way. Instead of arguing and screaming, they quietly distort their financials, hide valuable property, and stash away money. Now what?
Red flags that point to financial lies
If you or your client suspect financial foul play, my best advice is to avoid playing money detective and get a forensic specialist involved right away. An inexperienced layperson can render a physical crime scene difficult to process (and useless in the courtroom). The same is true of financial lies. A trained professional can do more if the evidence of wrongdoing is fresh and un-messed-around-with.
Here are some early red flags that may prompt a deeper look.
- A spouse maintains complete control of all financial and banking information. That can manifest as refusing to share access passwords and account numbers with the other spouse, or dragging out the process of supplying basic financial information.
- A spouse reports a dramatic decrease in business income that is not matched with a reduction in personal expenses. If you see someone who is bemoaning business failure or a threat of business bankruptcy and yet buying luxury cars or going on vacation to exotic destinations, beware.
- A spouse declares that a computer with key financial information has crashed with no hope of recovering information from the hard drive. No professional is allowed anywhere near that hard drive at any time until it goes mysteriously missing.
- When financial statements or details are delivered for analysis, they are messy, disorganized and incomplete. The spouse then pressures the other side for a quick turn-around on the documents.
How do you know when to bring in the specialist? The short answer is, whenever something does not feel right. Having been through dozens of cases, you have developed a good nose for what makes sense. If your client is concerned about the spouse taking advantage of him or her financially, raise the point with a trusted forensic accountant. Divorce agreements are the foundation for your client’s financial future – don’t let them be based on lies.
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