Most people do not believe their spouse is capable of hiding money. Yet, divorce makes it abundantly clear they are not only capable of it but of other unexpected behavior.
It’s not possible to control another person’s actions but it is possible to control your own.
When a marriage begins to deteriorate one tries to save it (as they should) but emotions take over and smarts take a back seat. The fighting or anguish over an affair or other stresses climb into the front seat. There’s no plan for the long-term future. The immediate future takes precedent. How can this relationship be saved?
One thing leads to another and an individual can become so removed from the practical side of life they are in danger of being taken advantage of.
It’s possible to work on a marriage and still be responsible for your own personal and financial future. Here are ten critical financial moves you need to take if your marriage is struggling.
1. Request all bank statements.
If you are experiencing marital problems it is time to request seven years of bank statements. Why? Banks only go back seven years. Therefore, assume your relationship limps along for five years. You then retain an attorney. At this point, you will no longer be able to see what transpired financially in the early years of your problems.
If you own a business together make sure the bank has not let your spouse open a business account without your knowledge.
A common divorce tactic is opening and closing accounts as an effort to hide money or taking out either large withdrawals or many successive small withdrawals. Thus, it is critical to keep abreast of any and all accounts both personal and/or business and what banks you both are using.
2. Request all retirement statements.
It is imperative to understand your full financial standing and assets from the time problems initiated. This is the time you should still be aware of any assets or accounts you may have. Why? As problems persist, it is common for spouses to drain retirement accounts and shift them to other accounts. This is often done without leaving a trail. Money is withdrawn rather than transferred. And money can be hidden in illegal trusts or other accounts which will prove difficult if not impossible to ever locate if you haven’t kept abreast of the situation.
3. Request your mortgage documentation.
Call your mortgage company and request the most recent documentation detailing your mortgage. It’s important to find out what your approximate equity and payoff amount is. And determine if there are any home equity loans or anything you are unaware of. It is also a good idea to get them to send you a record of your payments received the prior two years. This way if your spouse is financially abusive in divorce and goes behind in the mortgage there is evidence that there was no history of this before the divorce. Hence, a pattern of financial abuse exposed once the divorce was initiated.
4. Investigate your insurance policies.
Insurance policies depending on the type can sometimes be borrowed against. It’s important to find out what policies exist and that no changes have been made. This doesn’t have to be a "Dateline" or "20/20" sinister scenario it could simply mean a spouse has stopped paying a policy without the other spouse’s knowledge. Critical information if the other spouse is a stay at home parent and could become homeless. Regardless, this is personal and financial information every person should remain educated and in the loop about.
5. Don’t just sign your taxes.
Do not just sign your taxes. Look at them. Assess every single detail. Is the income still approximately the same, deductions, business still structured the same? Are taxes still being paid? This way you will see over the years of marital problems if any changes have been made. If income suddenly seems to be dropping, etc. However, spouses who want to hide money are willing to do illegal things. Therefore, they could file another tax return and forge your signature or they could file personal taxes and not business taxes if you own a business together. That way they can make their income appear lower.
If you are having marital problems every couple of years you should request a copy of your tax return directly from the IRS.
6. Run your credit history.
Run your credit history as soon as your marital struggles begin. Know your credit score you will need it to move. You need to continue to run your credit report at least once a year to make sure no credit cards or loans have been taken out in your name. This is a common and financially abusive tactic used in divorce. Know your own credit.
7. Assess your transportation.
If you have a car which is old or which has a high car payment it is time to assess your situation. An older car could need repairs and you may not have the money to maintain it in divorce. Likewise, a high payment may be unrealistic. A new car with a lower payment or a car which is paid off is a good goal to strive for the minute problems begin. However, problems may persist over a long period of time and a car is critical for maintaining a job so keep assessing it.
8. Determine where bills are being sent.
It is common for spouses who want to hide money to establish a P.O. Box. This would be where hidden money in retirement and bank account correspondence would be sent. It would also be where credit cards or loans that have been taken out in their spouse’s names would be sent. It would also be where credit cards they are using for things they do not want their spouse to see are sent. Be alert to changes made in mailing addresses. You may not know how to determine if your spouse has gotten a P.O. Box. But you can take an inventory of the bills received at the start of marital problems. Has a bill stopped arriving? Are all retirement accounts, credit cards, etc. still coming to your address?
9. Look for financial facts not words.
Financially abusive spouses like to set up the story. If they are suddenly claiming a huge drop in income or that they are struggling to pay the bills you need to educate yourself. Do not simply believe words. Stay abreast of income earned, monthly income, and monthly expenses. Check to see if the amount of salary or 1099 actually match the deposits made in the bank account for that year. In other words, are all paychecks being deposited or are large sums missing? Is the amount deposited $40,000 for the year when the pay is $50,000 for the year? Are the typical business earnings vastly different than the money deposited? The most abuse is with the conventionally self-employed or those who are independent agents or contractors and receive 1099’s because it’s easier for them to hide money but claiming more business expenses.
10. Get a Job before an attorney.
It’s really important to get a job before you get a divorce attorney. A stay at home parent is the perfect candidate for financial abuse. It matters less you may get a few dollars more in divorce and more that you are not in a position to be abused or bullied by another individual. Some stay at home parents want to give their youngest children the same experience their oldest children had. That is understandable but get some type of higher earning part-time job to position to a full-time job or whatever education and training may be needed to support yourself post-divorce. Financially abusive people don’t want to be fair and they will use the fact you stayed home to raise children against you even though they benefited from it.
They want to win.
If your marriage is suffering it is time to take control of your own life both personally and financially.
It’s a given divorce provides a sense of loss and losing control.
Preventative measures can lessen the devastating outcome.
At the very least, it can diminish a spouse’s ability to be financially abusive.