Occasionally, I run across a situation in an equitable distribution case where one party decides that if he or she can’t have it, no one will. That spouse then begins a vindictive campaign to hide money and assets, transferring things to other people, moving funds from bank accounts, cashing out retirement, and letting mortgages go unpaid. It’s a tough situation to deal with and potentially very damaging to the financial future of the other spouse. Here’s what you can do to prevent this from happening to you.
First, know what you have. Before you ever get to the point of actually separating, gather as much information as you can on financial accounts. This includes accounts that are in only one person’s name, business accounts, stocks and investments, and retirement accounts. Even a single account statement can provide an account number that your attorney can use to get years worth of records. Make copies and keep them safe. Gather information on property and on debts as well–deeds, mortgage statements, home equity lines and lines of credit, credit cards.
Second, when you do separate or a separation is imminent, get an injunction against the other party preventing them from taking the money out of those accounts and running up new debts. You can do this quickly. An injunction is a court order that basically says no one will conceal, transfer, or waste any of the funds in accounts held by the parties until an equitable distribution hearing is held and the marital estate is divided.
Third, monitor these accounts and debts as best you can to make sure the other party is following the order. This is by no means a foolproof remedy, and quite often someone who is dead set on hiding some amount of money can figure out a way to do it. But it does offer some protection. If you don’t take these steps to protect yourself, you may find that when the time comes to divide the marital property and debts that the other party has managed to hide or waste so much in property and assets that there is very little left to divide and you are left with little more than debts. So, use the tools available to protect yourself. It is better to take these steps up front than to have to kick yourself later when you realize that what you spent years building during the marriage is suddenly gone.