What is a High Net Worth Divorce?

What is a high net worth divorce?A high net worth divorce case is one in which the divorcing couple has significant assets, property, and income to divide. These cases often involve complex property division and alimony arrangements. Generally, this means at least a million dollars in assets that need to be divided.

Divorce can be especially complex for high net worth individuals, requiring in-depth negotiations and property division arrangements. In such cases where significant assets are at stake, it’s essential to consider the possibility of hidden or undisclosed funds by either party. This is often a difficult task as cash is notoriously hard to trace.

When marriage hits the rocks, some people may try to get creative or even go to extreme lengths to protect their financial well-being. Here are some ways people try to hide money during a high net worth divorce:

1. Investments: Some people will try to put money into private investments where they don’t think they’re going to get a 1099 at the end of the year.

2. Gifts: Sometimes they will just deliver money to their friends.

3. International Travel and Transfer: Keep an eye out for international travel. Certain Caribbean islands are notorious havens for hidden money. If there’s an unusual amount of cash withdrawn from your estate without explanation it could be indicative of funds fleeing overseas. So stay vigilant – global travel might just mean they’re taking money with them!

4. Transferring Assets to Another Person: Trying to prevent their soon-to-be ex from getting ahold of them, some spouses may gift assets to friends or family members in an attempt at concealment.

5. Underreporting Income: A spouse may underreport their income to make it appear as though they have less money than they actually do.

6. Overstating Debts: A spouse may overstate their debts to make it appear as though they have less money than they actually do.

7. Delaying Receipt of Bonuses or Stock Options: A spouse may delay receiving bonuses or stock options until after the divorce is finalized.

8. Creating Fake Debt: A spouse may create fake debt by borrowing money from a friend or family member and then repaying it after the divorce is finalized.

9. Hiding Cash: A divorcing spouse may try to protect their assets by concealing them in a variety of places. These can include a safety deposit box, an off-the-books account or even under the mattress.

10. Overpaying Taxes: A spouse may overpay their taxes in an attempt to receive a larger refund after the divorce is finalized.

11. Selling Assets for Less than Market Value: A spouse may sell assets to a friend or family member for less than they are worth in an attempt to conceal their true value.

12. Using Cryptocurrency: A spouse may use cryptocurrency to transfer assets, as it is often difficult to trace.

How do you find hidden assets in a high net worth  divorce?

Finding hidden assets in a divorce can be a challenging process, but there are several steps that you can take to uncover them. We go through a three step process.

1. Preliminary Review: I have my clients go over financials with me and we review all of the financial statements, including bank records, securities transactions, credit card activity, and cash withdrawals. Together we assess anything that may raise suspicion or questions of possible wrongdoing that require further clarification or investigation.

2. Reviewing Suspicious Activity: If our suspicions and evidence warrant it, I’d recommend bringing in a highly qualified forensic accountant to track the financials. This individual will generally be a certified public accountant with fraud investigation expertise. This individual is ready to uncover any potential wrongdoings.

3. Hiring a Forensic Accountant: A forensic accountant will carefully review all financial documents, including tax returns, bank statements, and investment account statements. They will look for any unexplained transactions or discrepancies that could indicate hidden assets. They may conduct a lifestyle analysis to compare a spouse’s reported income to their expenses and assets. If their lifestyle seems to exceed their reported income, they may be hiding assets.

They can also search for offshore bank accounts that may be used to hide assets. Forensic accountants can also use specialized software to trace money transfers and identify any foreign accounts. If a spouse owns a business, a forensic accountant may examine the company’s financial records to determine if any assets are being hidden or undervalued.

If you are thinking about a divorce or going through one and you need assistance, feel free to consult with us.

Turner Thornton is a highly-regarded Fort Worth family law attorney who leads Varghese Summersett Family Law Group. A skilled negotiator and experienced litigator, Turner has successfully guided hundreds of individuals and families through the most tumultuous time of their lives.

Divorce, child custody disputes, and property division are among the most contentious and complex cases in the legal system. Turner understands the intricacies and complexities involved in family law and works strategically to find and implement the best strategy for each client. While many cases are resolved through mediation, others require an aggressive courtroom battle. Turner is skilled in all aspects of case resolution and treats every person who walks through his door with honesty, professionalism, and compassion.