If you think your marriage is soon to be part of the 50-percent divorce rate in Maryland, the thought may have crossed your mind to start stashing money in a secret account. You should know that it is, in fact, illegal to hide assets from a divorcing spouse. That does not mean the same thought has not crossed the mind of your partner, however.
According to HuffPost, 30 percent of those who share finances with another person have hidden purchases or assets from them. Some 7.2 million Americans admit to hiding a bank account or credit card from a partner. Here are some of the ways people can hide assets; many are small things, but taken together, they can add up to a good-size nest egg for someone starting over.
Overpay income tax
Simply overpaying the IRS is one way to stash cash. Your partner can ask the IRS to use extra funds for the following year, or several years, depending on the payment amount.
Create false expenses
If your spouse owns a business or works as an independent contractor, he or she may “pad” expenses, which offsets some of their income on tax forms. Along with hiding assets, this is tax fraud.
With online banking and quick-pay options such as PayPal, it is easy to transfer money to an individual account or to a friend. Making several, smaller payments can help keep this method under the radar.
Friends and family members may aid your spouse by holding on to “loans” which reduces your spouse’s assets. When your divorce is final, they then pay the loan back.
Buying jewelry, art or antiques can be another way to hide money. Downplaying the value of these items, then selling them for actual value following a divorce is a simple trick.
Staying alert to your joint finances, including credit-card accounts and purchases, is crucial if you believe you are headed for divorce. After all, if you are aware of issues in your marriage, your spouse probably is too.
This article on hiding assets is for informational purposes only. It is not meant to be taken as legal advice.