Finances: Where Gumshoes Tread – Tracking Your Ex-Spouse’s Cash
Many observer of marital politics knows that dishonesty is the fuse that ignites scores of divorces. Hidden lovers, hidden addictions, hidden pasts all contribute mightily to today’s divorce culture in monumental ways.
But once you flip over the rock and shed light on some of these vices, the real hiding begins. That’s when a spouse, fearful of a divorce court’s retribution, may begin hiding financial assets that only again see the light of day well after the spouses have parted and the lawyers have left the building.
That’s when the real pain can begin. Tens of thousands of dollars in hidden credit card debts, decimated bank accounts, and/or squandered investment portfolios are only a few of the horrors that have befallen unwary spouses who didn’t keep an eye on the books during their marriage years.
“Hiding assets is not that uncommon,” says Byron Moldo, a founding partner at the Los Angeles law firm Moldo, Davidson, Frailio, Seror & Sestanovich. “Often, to get the financial records you need, you have to hire a private detective to literally trace the ex-spouse and see where they go and how they spend their money. People tend to get very secretive when they start thinking about divorce. But if you can manage to pry credit card receipts and phone bills out of them, you’re on the right track.”
So where to start? Robert Fitzgerald, a divorce investigator with The Lorenzi Group, a Boston-based security and investigations firm, says when it comes to finding out what money your ex-spouse does or doesn’t have, there are quite a few things to think about first.” You really have to be careful about doing things right,” Fitzgerald says. “For example, we recently had a guy who wanted to investigate his wife’s work laptop. But that’s illegal — the employer owns the computer, not the wife. We can look at a home computer but not an employer’s computer. We could have faced criminal charges, but clients don’t want to hear that.” What information, legal, of course, should you focus on? “It’s like filling in pieces of a puzzle,” adds Fitzgerald.
“What e-mail addresses does the spouse have? Typically, that means work or home address at, for example, AOL.com or Verizon.net. What’s really important is the sum of all the parts. You can never fill in every single answer. It may just come down to what kinds of credit card statements do you see coming through the house. Some spouses I see don’t even realize there is another credit card or another email address. Every case is different.”
Fitzgerald also spends a lot of his time checking web histories and seeing where spouses went in cyberspace. “That’s actually very easy to do. We use web tracking software to see where spouses went, as well.”
Be prepared to look overseas, divorced men and woman sometimes try to park money overseas in secure, private accounts outside of the prying clutches of the Internal Revenue Service. “Offshore funds are very difficult to find,” says Jeffrey Leving, founder of DadsRights.com. “Even a good lawyer may not help here. I’d hire a detective who specializes in financial fraud.”
You might need to get the courts involved, as well. “Sometimes you need to go before a judge and get permission to get access to bank or brokerage records,” Fitzgerald explains. “Then we go in and see what is there and what is deleted. In most cases, all data on computers, like e-mails or text messages, or web sites or credit card transactions, stay there for years. It’s a treasure trove for us.”
What can a good divorce lawyer do with hidden financial information that suddenly pops up? In a word, use it as leverage. “The attorney is now armed with evidence that the ex-spouse is hiding money, which is never good in the eyes of the law”, says Fitzgerald. “We had one case where a spouse was his financial books, and he had created a dummy account. We found it, and the attorney used that as a hammer, telling the spouse that he would contact the Internal Revenue Service if he didn’t play ball. It’s a powerful weapon.”
If you suspect that your spouse is involved in some financial shenanigans, or if you notice that your asset values are too low or the checking account doesn’t square, don’t panic and don’t confront him just yet. Instead take the following steps:
1. Get the last three to five years of joint tax returns. If you can’t locate them, call the Internal Revenue Service at 800-829-3676, and ask them to send Form 4506. For $23 they’ll send you a copy of each return.
2. Check any safe deposit boxes you have in both of your names and record the contents.
3. Make copies of the past year’s worth of bank statements, brokerage accounts, and other investments.
4. Scrutinize all credit card statements from the last year.
5. Review all insurance documents — homeowners, auto, life and personal property.
6. Call a major credit bureau and ask for a copy of your credit report: Try Experian, 800-682-7654; Equifax, 800-685-1111; or Trans Union, 800-888 4213. They’re the major players in the industry.
It’s also a good idea to contact your bank and check out your ATM receipts. Has your spouse changed his withdrawal habits? Has he or she taken out money from ATM’s nowhere near your home? Most importantly, has he or she changed any of your joint accounts to individual ones? These might be signs that your ex-spouse is trying to hide something from you.
If your worst fears are realized, or if you are unable emotionally or tactically to take those steps, you can always contact a private financial investigator like Fitzgerald or matrimonial lawyer to dig up any financial dirt for you. For a price of about $100 to $350 per hour, a trained investigator will dig even deeper and trace bank accounts and other financial records; analyze the financial circumstances and the records behind them, and search share registries to trace assets.
If records are missing, a financial investigator can help you determine the extent to which records are missing, obtain relevant independent information from other sources, and reconstruct records from as many independent sources as possible. A good place to start is the American Academy of Matrimonial Lawyers.
One last word of advice: Any hidden assets you uncover give you real leverage in court proceedings. So don’t be afraid to wield that hammer when necessary. Say, for example, you’ve discovered your ex-spouse has been hiding thousands of frequent flier miles. If he or she wants them back, make them pay by adding a few thousand in cash to the divorce settlement. If he refuses, tell the judge your ex-spouse has been hiding those assets. Chances are you’ll walk away with the miles. Maybe the extra money, too. After all, nobody likes a sneak. Especially divorce court judges.