Divorcing in MN: Where has the money gone?Aug 25, 2023
Having a clear understanding of your finances is a great way to feel empowered, especially when going through a divorce in Minnesota. Oftentimes when couples begin the divorce process; one spouse will sit back while the other goes through all the financial information. This can be great for some couples, but there is also a risk of financial information not being shared or hidden. This is why I invited forensic accountant Tracy Coenen on the podcast. During our episode she shares the red flags to look out for, where the most common place is that your spouse will hide money, creating a spending plan and more.
Tracy has been in the forensic accounting space for 25 years, and although typically divorces do not need that level of support, she does have women come to her often for support to uncover hidden finances. Because of this, she created the Divorce Money Guide. She kicked off the episode with financial red flags that people should be aware of and shared a few:
- Being secretive about the money
- Behavior change - being secretive about their whereabouts, hiding their phone, and being quiet about how their spending money
- When documents start disappearing in the house from where they are typically kept such as tax forms, etc.
- Forged signatures on documents
- Giving you documents and have you sign them without letting you read them
- Credit Card offers to a new bank showing up in the mail
- Spouse starts talking about a new bank
Next we talk about where to start when you are first going through a divorce. The best place to start is to get a good grasp on your finances. Pull up statements, review where money is being spent. Understand your monthly expenses for the current cost of living and then break down what your more luxurious spending is. Get a realistic picture of what you will be able to afford after divorce, what items are must have and nice to have, and create a spending plan. Now is the time to stop relying on your spouse to manage the money, and start taking empowered control.
Determining if there is financial infidelity or hidden accounts can be a bit tricky. The first place to start is skim financial statements, is there any money that is being transferred to a different account or paychecks that are missing that should have been deposited? Monitor the incoming mail for any new credit card offers or listen for your spouse to be talking about a new bank. Oftentimes if there are a bunch of new credit card offers coming in, it's because a new account has been opened at a bank. Once you’ve done all the digging you can, you may need to have your lawyer subpoena for any additional financial statements/loans/401K information.
Tracy left us with the advice that even if you aren’t heading for a divorce, doing a monthly review of finances is a great idea. Sitting down and understanding what money is coming in and going out, how much your monthly bills cost, what’s in your retirement funds, etc. This creates a way for both parties to feel knowledgeable about what is going on with finances and clears the stress of potential hidden money.
Check out Tracy’s website where you can find the Divorce Money Guide and many other great resources. As always, if you are looking for someone to hold your hand and walk with you side by side through the mediation process, I am here to help! Reach out and schedule your free consultation today.
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