Most people are aware that divorce proceedings lead to a great deal of emotional distress. However, many do not realize how much a divorce can damage their personal finances, especially if they are close to retirement age or have stayed at home rather than worked for years.

If you are going through a divorce, it is essential that you get everything that you are entitled to. Sadly, this is easier said than done as your spouse may hide their money or assets, such as stock shares, stock options, real estate, trust accounts, and investment accounts during your divorce. If you believe your spouse is hiding money, you should do the following:

Contact the Internal Revenue Service

When a couple ends their marriage in divorce, separating their lives from each other can become very complicated. The process will require the resolution of a number of issues, including determining how to divide property, allocate parental responsibility, and calculate the amount and duration of child support or spousal maintenance. When couples have a large amount of assets, the complexity of these matters can increase exponentially, and mistakes made during a high net worth divorce can have long-lasting consequences. During a high asset divorce, couples should avoid making these mistakes:

1. Not hiring a financial advisor. A high net worth divorce often involves a number of complex financial issues, including real estate, business valuation, and pensions, investments, and retirement accounts. In order to gain a full understanding of what both spouses own, earn, and owe, a financial expert’s assistance is often required. By consulting with a financial advisor at the beginning of the divorce process, couples can avoid unexpected complications and resolve financial issues as smoothly as possible.

2. Hiding assets. Spouses in high net worth divorces may try to transfer some of their assets to a child or relative to avoid dividing these assets with their spouse, or they may try to keep from disclosing the full extent of their earnings in order to reduce the amount they will pay in child support or spousal support. Attempting to hide assets is not only illegal, but spouses who try to do so will lose their credibility and be at a disadvantage in any disputes that arise during the divorce process. It is important to provide accurate, complete financial information during divorce, which will allow the process to be completed more quickly and efficiently.

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There is a societal fascination with those who have a substantial amount of money and those who are famous. Anything anyone does in these two categories becomes publicized on social media, publications, and other outlets. When a divorce is involved, it seems as though every move is under the lens of a microscope. The inconvenience of divorce being a part of public record does not help matters. What other issues face couples in a high net worth divorce and what mistakes should you avoid?

Hiding Assets

Occasionally, a mistake happens in which assets are forgotten, especially in estates where the assets spread throughout a large area. However, if someone is caught transferring money to another bank account, or to a child, or otherwise trying to hide money, the individual loses all credibility in a divorce case.

As baby boomers settle into retirement, many are finding that a divorce has now become part of the plan. It is now estimated that “gray divorces” or those filing for a divorce after the age of 65, has tripled in number within the past few years. Aside from the challenges of any divorce, a gray divorce presents a new and often costly challenge, the division of marital property such as a pension, Individual Retirement Account (IRA) or a 401(k) plan and the fees associated with the Employee Retirement Income Security Act of 1974.

The division of one of these plans, the 401(k), a qualified profit-sharing plan offered to employees with individual salary-based contributions, usually matched by the host employer, has created a new legal reference now coined by divorce attorneys as a “silent fee."

As the couple’s wealth has increased over the years, the “silent fee” determines the cost of repositioning or division of funds, often leading to increased frustration during the division of property process.

My fiancé and I are looking to buy a house and live in it after we are married. My credit is bad so my fiancé wants to buy the house in his own name. If we get divorced, will this house be our marital asset or does he get to keep it as his separate or non-marital property?

Under existing Illinois divorce law, a house purchased before a couple marries but in “contemplation of marriage” may, in many cases, become a marital asset belonging to both parties. As a marital asset, a subsequent divorce would require the home to be considered for division between the parties.  

If you and your husband bought a house prior to your marriage, with the intention that you live in it together, then you have likely purchased a house in "contemplation of marriage." Even though the house is deeded in your husband’s name only, it may very well still be a "marital residence" that must be divided in your divorce case.