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Divorce and the Red Flags of Financial Gaming

In high value divorces, we frequently observe attempts on the part of parties to obfuscate the financial picture of a marriage by hiding or undervaluing assets, colluding with partners or family members in closely held businesses to understate income, or to operate shell companies while shifting the income away from the apparent failing entity. While Kentucky now mandates the reporting of certain financial basics in every dissolution by court rule, a case with more complexity is going to require a significant level of discovery and analysis that require far more information than the boilerplate forms provide. A good divorce attorney will be able to craft discovery requests to get to the heart of the financial picture if factors like the following are observed in a marriage:

1. Your spouse controls all bank account information and online passwords, while being secretive about household finance.

2. Your spouse maintains a separate mailing address for the purpose of receiving bills.

3. Your spouse deletes a personal accounting program or claims that the computer containing important financial records has crashed.

4. Your spouse acts hastily when obtaining signatures on important documents, like tax returns and deeds, claiming some immediate need to get it done without discussion or review.

5. During a period of marital stress, your spouse proposes an execution of mutual durable power of attorneys for estate planning purposes, even though you've not had discussions on that topic in the recent past.

6. Your spouse suddenly claims that the business is failing, suffers an income decrease without a corresponding reduction of expenses, or (if employed in a position with expense reimbursement) has a large number of unreimbursed business expenses.

7. Your spouse binges on unusual expensive purchases of extensive spa services, cars, recreational activities, clothing and jewelry.

8. Your spouse reports a dramatic decrease in value of marital and/or business investments, but declines to engage in meaningful discussions of the asset allocations or causes.

9. Your spouse owns multiple cell phones.

10. Your spouse incurs large amounts of debt.

11. Your spouse gambles while placing money "on account" with casinos.

This list is not exhaustive, but demonstrates some of the red flags which invite scrutiny in a divorce.