In divorce cases, fraud is relatively rare but personal motives can lead to a party, for reason of wanting to keep their perceived "fair" share, minimizing asset values and incomes, or possibly even omitting them altogether, to retain or obtain a greater share of the marital pot.
In family law, financial disclosure disputes are governed by Rule 12.285. Under this procedural rule, comprehensive disclosures are required in any case that involves a dispute over money. All assets and incomes must be identified when obtaining a fair settlement while going through a divorce. If one side is refusing to provide explanations or hand over statements or any other financial documentation or there is a lot of information absent when you receive the papers. Maybe the figures are just not stacking up and there is no way their current lifestyle could be afforded based on declared incomes and known assets.
If such contentions can be proven, courts may find that there are compelling circumstances for reopening the divorce case.
When one spouse has a greater understanding of the assets, values, incomes and overall financial wealth of the marriage, it is safe to say that awareness is regularly used to encourage the other spouse to enter into an early settlement, sometimes without legal representation.
With a combined 60 years of experience, our firm has seen every trick. Our experience in reading "between the lines" of personal and business financial disclosures is unprecedented.
Here are a few red flags to indicate whether your spouse may be being less than honest about their finances.
Accounts and passwords
If passwords are suddenly changed on a shared email and/or joint bank accounts, you should be concerned and consult with an attorney.
Transfers of property or shares to children/family members
A decision to transfer property to your children or family members should serve as a warning if there is no genuine reason why. Assets you thought you owned as a couple are suddenly held by family members.
Strange cash withdrawals or spending behaviors
You notice an unusual pattern of large sums of cash being withdrawn and a big change in spending behaviors. Perhaps there is a flurry of high-value gifts or money is moved from the accounts you know about and seemingly disappears (overseas accounts are a popular destination).
Loaning or giving money to family and friends
A debt you did not know about to a family member suddenly gets paid off. Unexpected cash gifts to family or friends. Both are strong signs that money is been funneled.
An abrupt change or dip in income
Suddenly the usual lifestyle becomes unaffordable. Your spouse has gone from being well-off to near insolvent and unable to pay for anything. Coincidence, or a sure sign of income deferral and divorce planning.
Funds for your spouse's lifestyle continue to be available but funds for your lifestyle are dramatically reduced to minimize your future "income needs".
A reduction in the value of the business/changes in business structure
If your spouse has their own business they may seek to manipulate, or understate the value of the business and the income in an attempt to reduce the final divorce settlement.