How to Hide Money From a Spouse in Florida

Why Do People Want to Hide Money?

We occasionally receive requests from clients who want to hide assets from their husband or wife. Most of these clients want to hide money from their spouse for one of two reasons:

  • People want a private reserve of money in the event their spouse leaves them and takes with them their marital assets, or
  • People want to protect money for themselves in a divorce proceeding.

Creating a Hidden Money Reserve

Sometimes, people become insecure about their marriage and fear their spouse leaving them or filing for divorce.

They are worried that their spouse could steal money from marital accounts, which they would not be able to recover in a judicial divorce proceeding.

These people want a money reserve that they can use if their spouse leaves them and drains their joint accounts.

Hidden Financial Accounts

Most married couples have joint financial accounts. Joint financial accounts allow either spouse to write checks and withdraw funds. Your spouse may, without notice, withdraw all the money from a joint marital account. They may sell all securities in joint securities accounts.

The bank or financial company is not obligated to notify you of a unilateral withdrawal unless you have established security settings including, for example, two-factor permissions. Such security measures are impractical for bank accounts where both spouses are accessing on an ongoing basis to pay bills.

Some people want to establish a personal financial account to store money legally that their spouse may not access. The first challenge is that your separate financial accounts will issue 1099 income reports to the IRS, and any income earned on your separate account will appear on your federal tax return.

Only accounts that pay no interest, or tax-free interest, will escape disclosure at tax time. If your spouse reads the joint return they will find income reported from these accounts on 1099 forms.

The other practical issue is that any financial account in the U.S. is part of financial database. If you spouse suspects you of hiding your own money a professional investigation would probably reveal accounts listed under your social security number.

Hiding Money in a Company

People suggest to us that they can hide money from their spouse by creating a business entity such as an LLC and transferring money to the LLC. The cash, they think, can be hidden in the business bank account or in purchased business investments.

Florida maintains an online listing of companies, including the name of the person who organized and manages the company. An online search would reveal any company you created or manage. Other states, such as Delaware, do not make public the names of organizers or managers.

Alternatively, for people who have an existing and profitable business, money can be hidden from spouses by using multiple business checking accounts.

The business could hide money by funding a secondary business account in a bank other than the business’ primary operating account. Or, you can withdraw money from the business account, show the withdrawal as a business expense, and then keep the withdrawal in a personally owned asset.

If your spouse is involved in the business ownership or management they may see evidence of secondary business accounts on business records and tax returns.

Hiding Money From Your Spouse in a Divorce

Hiding money from your spouse in a divorce is more difficult and risky. Divorce actions require you to provide financial affidavits listing all your assets. Concealing assets in a sworn affidavit or in court testimony may subject you to contempt and perjury charges.

A court has broad powers to discover your assets and to enforce orders for alimony and child support. A court order to pay alimony or support requires you to pay money from whatever sources are available.

Your spouse and the court do not have to identify your assets. Alimony and support orders are enforceable with orders of contempt or even incarceration.

You, not the court, are required to assemble the assets needed to pay these awards. Hiding money from your spouse will not prevent the court from requiring you to access hidden funds to pay alimony and support.

Divorce may also include a property settlement where marital assets are divided between spouses. Property settlement awards are akin to civil money judgments.

The court typically orders one spouse to pay a sum of money to the other spouse. Property settlement orders must be collected using the same tools used to collect civil judgments, and the debtor spouse may protect his exempt assets such as a retirement account or homestead property.

The court does not have equitable contempt power to collect property settlement awards.

Hiding money may help you avoid enforcement or property settlement awards, but it will not effectively protect money from alimony and support orders.

Using Offshore Trusts

Offshore trusts, particularly a Cook Islands Trust, are effective asset protection tools to protect your assets from judgment creditors. Offshore trustees are not responsive to U.S. court orders that seek to discover or recover assets.

An offshore trust can open foreign bank accounts that can be used to hide money from your spouse. The typical search for financial accounts would not discover money held outside the United States.

An offshore trust may also protect against the collection of property settlement judgments. Creditors who are not subject to U.S. courts find it difficult to levy on an offshore trustee.

Offshore trusts will not effectively protect you from alimony and support awards. A court may hold you in contempt for your failure to access your offshore trust to pay alimony and support payments.

Hiding Cryptocurrency from a Spouse

Cryptocurrency held in a private wallet effectively hides money from asset searches. Private wallets are accessed with codes and passwords that are in the owner’s personal possession or memory.

Absent truthful testimony about private wallet accounts, a spouse or a creditor cannot discover private crypto wallets. Of course, there may be records of using funds in a financial account to purchase cryptocurrency.

Another option is purchasing crypto mining equipment instead of buying the currency itself. An existing business could purchase computer hardware to mine cryptocurrency. The equipment would appear on the company financial records as a capital expenditure to buy computers.

The business owner can then create cryptocurrency to be stored in a private crypto wallet. Without truthful testimony, a spouse would have difficulty discovering the acquisition or storage of the cryptocurrency.

Jon Alper

About the Author

I’m a nationally recognized attorney specializing in asset protection planning. I graduated with honors from the University of Florida Law School and have practiced law for almost 50 years.

I have been recognized as a legal expert by media outlets such as the New York Times and the Wall Street Journal. I have helped thousands of clients protect their assets from creditors.