In this episode of The Agent of Wealth Podcast, host Marc Bautis is joined by Tracy Coenen, a forensic accountant and the brains behind The Divorce Money Guide. Tracy’s passion lies in helping those who feel powerless in their financial situation while going through – or after – a divorce. By following her carefully laid out steps, people in the process of divorce go from uninformed and overwhelmed to feeling in control of their finances.
In this episode, you will learn:
- The first thing you should do with your finances if you’re thinking about filing for divorce.
- How to figure out if your partner is hiding money or assets.
- Financial “red flags” to look for in a marriage or divorce.
- A variety of financial tips for a divorcee who has not typically managed the family’s finances.
- And more!
Disclosure: The transcript below has been lightly edited for clarity and content. It is not a direct transcription of the full conversation, which can be listened to above.
Welcome back to The Agent of Wealth Podcast, this is your host Marc Bautis. On today’s show, I brought on a special guest, Tracy Coenen. Tracy is a nationally recognized CPA, forensic accountant, and the brains behind The Divorce Money Guide. As a woman in an industry once dominated by men, Tracy has worked tirelessly to rise to the top as the one of the most sought-after forensic accountants working in the divorce space.
Tracy’s passion lies in helping those who feel powerless in their financial situation. By following her carefully laid out steps, people in the process of divorce go from uninformed and overwhelmed to feeling in control of their finances. Tracy, welcome to the show.
Marc, thanks for having me.
Of course, I’m excited to talk to you today. Because I’m a financial advisor, a lot of people engage with me when they’re going through a divorce. It really is a challenging period of time that comes with a lot of emotions and a lot of stress. To put it simply, it’s overwhelming, so I can see how beneficial it is to have a guide, like The Divorce Money Guide.
Yes, divorce is one of the most difficult times in someone’s life, right? It’s one of the most difficult things someone can go through. Certainly, issues with children is probably the hardest part of going through a divorce, but second to that is the financial aspect.
Finances can create a lot of stress during a divorce. People in this situation may be worried about:
- How the assets are going to be divided.
- How they’re going to afford the divorce.
- How they’re going to survive after divorce.
But one of the issues that is near and dear to me, because I’m a forensic accountant and fraud investigator, is when divorcees suspect that something has happened to money or assets. That could mean a variety of things:
- Money is being hidden.
- Assets are being hidden.
- There’s been secret spending.
- There’s been inappropriate spending.
So I want to help people in the process of divorce to feel better about the money part of it.
Was this niche something that you’ve always wanted to do? Or how did you come to be an expert in this area?
Well I’ve been a forensic accountant for 25 years, but I started my practice 23 years ago. Back then, I intentionally did not do divorce work. I was not interested in it because there are some emotional components that can be difficult.
But, about five years into my business, I got an important referral from someone that I respect and trust. It was a personal friend of theirs, who was going through a divorce and had a lot of money at stake. So, I took that case and realized I was actually really good at dealing with the emotional piece while still focusing on the facts, details and numbers.
After that, I started doing divorce cases regularly, but it’s only this past year that I’ve been really focused on making forensic accounting more accessible. It’s very expensive to have a forensic accountant involved in a divorce, right? I’d say that about 95% of those going through a divorce can’t afford to hire a forensic accountant. Because the process is so expensive, I came up with this concept to help people do it themselves at a much better cost. That passion really began this past year.
That’s great. Now, how common is it for someone to hide assets from their partner?
Hidden Assets and Money in Marriage and Divorce
Well, that’s sort of a trick question because by the time people get to me, they’re pretty certain that there has been fraud. So almost every single one of the cases I work on ends up with some sort of hidden money or assets.
If you consider the universe of divorces, I think it is very common for divorcees to be suspicious of hidden money or assets. But how many of those suspicions turn out to be true? We don’t know… and I think one of the reasons why is because so many people don’t have the opportunity to dig into it. Divorcees don’t know where to look for hidden money. So, who knows how many cases…
I’ll say my gut says that there’s probably a lot of them. When you’re getting divorced, things have gone south in the marriage, and I think money is naturally one of those pieces that goes downhill. Someone starts spending on things that they shouldn’t… things like that. It may not be as common for a partner to hide boatloads of money in a secret account, but certainly as the marriage deteriorates, I think it’s pretty common for there to be secret or inappropriate spending.
You mentioned that you empower a divorcee to search for hidden assets themselves. Do you recommend that everyone going through a divorce utilizes The Divorce Money Guide, or should they have to have some kind of suspicion before they implement the tools in the guide?
Why Everyone Going Through a Divorce Should Utilize The Divorce Money Guide
I love that question. I feel that anyone in the process of a divorce can and should use The Divorce Money Guide.
When I first started working on it, it was about fraud, and specifically for people who had suspicions about hidden money and assets. But, as I was beta testing it with people, I was realizing that it’s also so helpful for people who have not been involved in the finances in their marriage.
Let’s say you’re a woman who’s been a stay-at-home mom for the last 12 years. Throughout those years, your husband has been the breadwinner and has been in control of the family’s finances. That’s just the way you divided the family duties. If you’re now getting divorced, you probably have no idea where to start.
Now this can be very overwhelming. If I said to a divorcee in this situation, “Well, start by retrieving your bank statements.” You would be surprised to know how many would say to me, “How do I do that?”
So, the guide walks people through a variety of financial processes from the beginning to end. That’s why it’s great for anyone going through a divorce.
How to Find Money in Divorce Cases
On the topic of getting documents, do you find that it’s challenging for a person to get their ex-spouse’s records, whether it’s the ex-spouse’s social security record or a pension record? What happens if the records haven’t been titled jointly?
That’s a great question. What usually happens is your divorce attorney will ask the other side to produce those documents. If they don’t respond, you can get them through a subpoena, an order issued by the court.
Ultimately, with that subpoena, it’s pretty easy. And a subpoena is very routine – attorneys use them all the time in divorce cases.
Can the subpoena be broad enough that it says, “Turn over all financial documents?” Or, does it have to specifically say the account numbers and bank numbers?
A subpoena can be very specific, but it could also be broad. Typically, if we know of the accounts that exist, we will list them out, but also say, “And, any other account in this person’s name,” so that if there were other accounts we weren’t aware of, those would be provided as well.
Okay. Now, let’s say there is an account that’s not provided after a subpoena, and not detectable on the ex-spouse’s’ tax return. Essentially, no one knows about it. Is there any way to uncover those types of accounts?
Yeah, some people talk about a sort of database of all bank accounts, and a divorcee could reference that database to find an ex-spouse’s bank accounts… Unfortunately, that doesn’t exist.
There are private investigators who claim they’re able to find hidden bank accounts, too. But I caution people against hiring those individuals, because they’re typically using illegal means to find accounts.
Here’s the right way to find hidden money or assets.
If you are aware of names of banks that your spouse has talked about, or that you’ve seen mail items to the house, that can be a sort of clue. For example, say you don’t know of an account at Wells Fargo Bank, but your spouse mentions Wells Fargo Bank a lot. In that case, we can send a subpoena to Wells Fargo to find out if there is an account there.
So, if you have some sort of clue to certain banks, your attorney could send a subpoena. That’s one way.
The other way we find out about hidden accounts is by reviewing statements from the accounts we do know about. We will go through them, looking for transactions. For example, there may be a transfer to an account at Wells Fargo, or a transfer to another bank, or record of a check being written. In those cases, we follow up with the banks through a subpoena. It’s really a matter of following a paper trail.
Makes sense. Now, we talked about it being a good practice for anyone going through a divorce to utilize The Divorce Money Guide. But, if a listener needs some more encouragement, can you share some red flags they should look for that could indicate fraud or hidden money?
Financial “Red Flags” to Look For in a Marriage or Divorce
There is a whole laundry list of red flags of financial fraud in a marriage. The most common one I see is a significant change in behavior. Some examples include:
- Your spouse becomes more secretive about financial matters.
- Your spouse becomes more secretive over their phone or computer.
- Your spouse becomes more secretive over their whereabouts.
- Your spouse becomes more controlling.
- Your spouse prevents you from accessing bank accounts.
Those are just some examples, but they are all huge red flags that there might be something going on with the money in the marriage.
But, remember, a red flag is only a warning sign. It’s not proof of anything.
Okay, let’s take it a step further. Let’s say a divorcee does uncover a hidden asset in the spouse’s name. What’s the next step?
What to Do Once Hidden Money or Assets Are Uncovered
You’ll have to prepare evidence of it, whether that is transaction history – on a bank statement or credit card statement – or other documentation that shows the existence of that asset and how it came to be.
If you’re doing this process yourself, you’re going to bring these statements to your attorney, show them what you found, and the attorney is going to help you put together that proof so it can be presented in front of the judge. The goal is for the divorcee who uncovered the hidden money or assets to get their piece of it.
Now, if money has been spent inappropriately… let’s say your spouse spent $50,000 on an affair partner. Half of that money is yours, right? But how do you get that $25,000 back? Well, if there are bank accounts, investment accounts, you can get a larger share of those. If you have equity in the house that’s being divided between you and your spouse, hopefully you could get a larger share of that equity. Or maybe you could get a larger share of automobiles or a retirement account, things like that. So, if there isn’t money to reimburse you directly, hopefully in dividing some of these assets, you would be able to recover your share of those inappropriately spent funds.
If it’s a matter of just an account that’s been uncovered, hopefully you’ll be able to get your half of that account as well.
We’re talking a lot about assets and hidden assets, but do you also see hidden things on the other side – whether it be loans or liabilities – that one spouse doesn’t know about until divorce proceedings?
The 1st Thing to Do With Your Finances if You’re Thinking About Divorce
Absolutely. I always recommend that people run a credit report on themselves as soon as they are thinking about divorce, or as soon as they enter the divorce process. As soon as possible, run that credit report to see what debts you are associated with.
What I’ve seen, over and over and again, unfortunately, is for example, someone who’s living in a home that they’ve owned for 15 years that they think there’s significant equity in. All of a sudden, they find out that there’s a home equity line of credit on it that has been run all the way up, and there’s really no equity in the house. So, this is certainly a concern.
There’s also a concern that there may be credit cards that you could be held responsible for. It’s absolutely an issue that I think merits some attention.
Have you ever seen issues arise after the divorce proceedings are concluded? If something is uncovered after the fact, is there a way to reopen the divorce case?
It is possible to reopen a divorce, but it is difficult because there’s a pretty high bar that is set for reopening. So, if that happens, you’re going to need some pretty solid evidence of fraud and deception in the process.
If you can, have something in your divorce decree that says, “If assets are uncovered later that you never disclosed, here’s what would happen to them.” Because, then you don’t have to reopen the divorce. All you have to do is go back to court to enforce this agreement.
Okay, that makes sense. Now, going back to The Divorce Money Guide, you can it’s something a divorcee can do on their own, correct?
Yes, it is 100% do it yourself, if you want it to be. I’ve had plenty of people complete the guide on their own. However, I received feedback that there are people who would like more support through the process. So, the free thing that I recommend is to select a friend or family member that you trust to help you complete The Divorce Money Guide.
For people who want even more support than that, I do offer a group coaching option to go along with the guide. We meet once a week.
And do you offer anything for post-divorce?
How to Come Out of Divorce With Your Finances Intact
Yes, I released the Post-Divorce Money Guide about three weeks ago. It’s a much smaller guide than The Divorce Money Guide, but it focuses on protecting yourself after the divorce is over so your ex can’t meddle in your finances. Things like changing the beneficiary on your life insurance policy… There are so many things to think about.
The Post-Divorce Money Guide has around 30 different things to consider once the divorce is final. One of the things that we talk about in it is how to create a spending plan, because now that you are not married, your spending is going to look a little bit different.
It talks about budgeting, spending, things like that… So, absolutely, there are so many important things that happen after the divorce.
That’s awesome. I think having a guide helps so much when it comes to dealing with the uncertainty. There’s one last thing I wanted to ask: Do you have any other general tips that we haven’t gone over?
I have so many tips – I could spend hours giving them to you.
The first thing I recommend you do is protect yourself. That’s step one in The Divorce Money Guide. I’m talking about things like:
- Run a credit report on yourself.
- Get yourself a brand new email address to use for your divorce communications.
But, when it comes to going through your finances – especially if you haven’t been actively involved in them before – I say take it little by little. You don’t have to understand everything in one weekend, right? Take it in small pieces, little by little. That will make it a lot more manageable.
And again, if you need some support, find someone you can trust who can help you. That could be an accountant you’ve worked with before, a family member, or a friend who you trust. I know it can be embarrassing to have someone else look at your finances because it feels very private, but, if you can find someone that you trust who can support you in that fashion, it’s sometimes really helpful.
Thanks for the great tips. Well, we’re just about out of time. Tracy, I want to thank you for being on The Agent of Wealth Podcast today. You gave some great information on the financial aspect of divorce. How best can someone find out more about you, and more about The Divorce Money Guide?
Your listeners can go to divorcemoneyguide.com to find The Divorce Money Guide. There’s contact information on the site as well, so feel free to reach out with an email.
If you’re on social media, you can find me on Instagram @DivorceMoneyGuide. Feel free to message me there, if you’d like. I appreciate anyone reaching out. I’ll help you if I can.
Great, we’ll link to all that in the show notes. Thanks again for joining me, Tracy. And thank you to everyone who tuned into today’s episode. Don’t forget to follow The Agent of Wealth on the platform you listen from and leave us a review of the show. We are currently accepting new clients, if you’d like to schedule a 1-on-1 consultation with our advisors, please do so below.