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How some spouses get caught when they try to hide assets

On Behalf of | Dec 16, 2021 | Divorce, High-Asset Divorce |

Michigan’s statutes generally classify all income earned during a marriage as a couple’s shared marital property. If an individual has reason to believe that a soon-to-be ex-spouse has hidden assets, the divorce process could uncover them.

As reported by CNBC, a couple’s joint income tax returns may provide clues to a spouse’s undisclosed earnings. When filing for divorce, the court typically requires spouses to submit their tax returns and financial statements from the past several years.

Information that a tax return might reveal

A missing tax return may signal a need to check for possible unrevealed earnings. By contacting the IRS, a filer may request a statement of a shared tax account. The information obtained could shed some light on hidden income.

Unpaid or unusual tax debts could reveal changed spending habits. As reported by the AARP, 4% of individuals surveyed in 2018 admitted that they hid a bonus or raise from their partners. Reviewing the information on a tax return or a spouse’s recent W-2 could reveal a previously undisclosed raise or bonus.

Credit reports may uncover new loans

Under Michigan’s laws, a couple’s debts are also classified as their shared marital property and must divide fairly. Ordering a credit report may reveal spending patterns that support a hidden addiction or an affair.

In some cases, spouses have started businesses that they intended to keep secret before leaving a shared marital home. New spending limits on a credit account, for example, may reveal that a spouse has requested an increase to fund a secret enterprise or an expensive move.

During a divorce, each spouse goes through a legal discovery process. By sharing all necessary documents, spouses may negotiate a fair settlement that takes into consideration all of their combined marital assets.