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3 tips for spotting financial mistruths in divorce

On Behalf of | Nov 3, 2023 | Division of Property

Uncovering financial lies is a critical step in ensuring a fair settlement when you’re going through a divorce. While discovering assets during a divorce is legally mandated, some individuals attempt to hide or underreport assets.

Understanding the signs of financial deception and knowing how to reveal them is crucial during a divorce. It’s not uncommon for one partner to have been less involved in the financial management of the household. This can lead to an imbalance of knowledge and power regarding property division.

1. Watch for obvious signs

The first step in detecting financial deceit is to recognize the common signs. One of these is the sudden repayment of debts to friends or family members, which could be a method to move money out of the account temporarily. Lifestyle changes that don’t match reported income and the transfer of assets to third parties are also red flags. 

2. Analyze all available information

Gathering financial documents is a fundamental part of the divorce process. This should include tax returns, bank statements, credit card statements and any other records of financial accounts. It’s important to review several years of history to identify any unusual transactions or changes over time.

Forensic accounting can also play a key role in unearthing financial lies. A forensic accountant examines financial records for signs of manipulation or fraud. They can help identify discrepancies, trace funds and evaluate business valuations if one spouse is a business owner.

3. Look for clues from online activities

Reviewing online statements, transaction histories and social media can reveal inconsistencies or undisclosed expenses. Even social media posts can reveal financial fraud. For example, if your ex claims to be broke but goes on a lavish vacation, that would signal that something is amiss.

Protecting yourself during the divorce is critical. Delving into all financial claims that affect the property division process is one option you have to do this.