Find Me the Money! Forensic Tips On How to Pin Down Your Financial Whereabouts During a Divorce

• Techniques for uncovering fraud that anyone can apply.

• How to spot financial “red flags” in a marriage.

• Financial Infidelity vs. Financial Abuse.

• Who needs a forensic accountant in their divorce?

• How do you save money with your divorce attorney?

• How you can protect yourself if you suspect your partner is hiding money.

• Simple tips to find hidden money in the bank statements and tax returns.

• …and much more!

If you would like to speak with one of our attorneys, please call our office at (503) 227-0200, or visit our website at https://www.pacificcascadelegal.com.

If you're interested in getting in touch with Tracy, you can do so by visiting her website at https://www.fraudcoach.com/

Disclaimer: Nothing in this communication is intended to provide legal advice nor does it constitute a client-attorney relationship, therefore you should not interpret the contents as such.

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Steve Altishin
Hi everyone, I'm Steve Altishin, Director of Client Partnerships here at Pacific Cascade Legal. And today, we're here with forensic accountant Tracy Coenen, to talk about making wise financial decisions during a marital dissolution and tips for what you can do if you suspect that your spouse is hiding money. Hey, Tracy, how you doing today?

Tracy Coenen
Steve, I am fantastic. Thank you for having me today.

Steve Altishin
Well, thank you for coming. I've been wanting to do this for a long, long time. It's really something that I think people can get something out of.

Tracy Coenen
I'm happy we found each other too. I mean, of course, it's a topic near and dear to my heart. And I'm really passionate about people who are going through the process of divorce understanding exactly what's going on with their finances so that they can make sure that they get a fair settlement in their divorce.

Steve Altishin
So you are a forensic accountant. Can you tell us a little bit what got you to that place?

Tracy Coenen
I sure can. I always start out by saying I'm a forensic accountant. And that means that I find money. So in more simple terms, I do fraud investigations. Some of that is in the corporate realm, when executives are stealing money, and some of it is on the divorce side when you have people getting divorces and needing to understand what's been going on with the money and potentially having suspicions that money is missing or has been spent inappropriately.

And how I got here was through my major of criminology when I was in college. I actually wanted to be a prison warden. That is what I stepped into that major to do. And in my sophomore year of the criminology program, I took an elective called financial crime investigation. And it was a class that was only offered once every few years. And I thought, “Gosh, I'm a sophomore. If I ever want this class, I should take it now because it might not be offered again before I graduate.”

And I just happened to love the subject matter. At that point, I took an accounting class to see if I was any good at the accounting side of it. And I was. And there you have it, I was sort of off to the races to eventually become a forensic accountant.

Steve Altishin
I love it. Dark secret, I ended up getting an accounting major after going through things like Old World English and poetry. So I kind of jumped around it as well.

Tracy Coenen
You know what surprises people is I don't actually have an accounting degree. I have a criminology degree. I did end up getting an MBA, so I've got lots of business background. What I ended up doing in order to get my CPA license was I took enough accounting and economics courses to qualify to sit for the exam, but I didn't actually have to have the accounting degree.

Steve Altishin
I like it, I like it. I listened to a podcast of yours about four days ago, and it was fascinating. You at one point talked about the terms financial infidelity and financial abuse in divorce. And it was like, how are they different? But you talked about that and how they kind of impact a divorce. So first of all, can we just kind of talk about what gets people into this sort of problem to begin with and what financial infidelity and financial abuse are?

Tracy Coenen
Sure. Everyone knows what infidelity is, right? Cheating on your spouse. We all know what that is. Think about financial infidelity in the same way: cheating with the money.

When you are telling lies to your spouse or your partner about what you're spending money on-- any dishonesty. If you're spending money on things that your spouse would never approve of, doesn't know about, that you're keeping secrets about-- oh, keeping secrets about the money is a big part of financial infidelity. So if you're being untruthful with your spouse or partner, there you go, financial infidelity.

Financial abuse has actually a lot of crossover with financial infidelity. I like to say they intersect a lot. Financial abuse is using money to exert control over your partner. Now it might be controlling or limiting their spending or their access to money. It might also be you spending money freely, flaunting that while otherwise being overly controlling about it. And you know that will impact your partner as well.

Financial infidelity can be a part of financial abuse as well. So telling those lies may come into play in the financial abuse side because that is an abusive behavior that is negatively impacting your partner.

Steve Altishin
Financial abuse, we find sort of in the divorce process, is really damaging to the other spouse because they're going into the divorce and even coming out of it not knowing and not having access to any financial knowledge. And so they really come out at a big disadvantage, especially going into the divorce because they don't know what they don't know. And that's got to be something that a forensic accountant in that situation can help with.

I mean, I imagine you have clients that come in to you and they say, “I haven't seen a checkbook in 22 years, and I'm not allowed to have a credit card, and I'm not allowed to spend money. And so I don't know where to even start talking to you about finances.”

Tracy Coenen
Well, let me tell you what is most typical that I see. In the vast majority of marriages, one spouse manages the money. And it's not typically from a controlling standpoint. It's just a routine type of thing because we divide up the duties in a marriage, in any kind of partnership.

You drop the kids off at school, I drop off the dry cleaning. I pick up the kids from school, you pick up dinner on the way home. We divide things. And so I look at the management of the household money the same way.

In so many marriages, one spouse takes control of it because they like it or they're good at it. And it makes a lot of sense. The spouse who's not involved generally isn't concerned about it, as long as they are able to spend money, as long as the bills are paid, things seem to be fine.

Now there are those situations, like you mentioned, where what we'll call the “out spouse,” the one who's not making the money, not in control, where they are restricted. They don't have a credit card or a debit card, they don't have access to cash. That certainly is a huge problem.

But if we go back to the typical situation where it's just a matter of routine, what we see a lot of times when divorce is filed, then that spouse who was in control of the money starts exhibiting controlling behaviors, cutting off the other spouse, not giving them access to be able to retain an attorney, or to be able to pay rent in a new apartment or things like that.

Steve Altishin
As a forensic accountant versus an accountant, you can help in those situations I imagine. I can see someone saying if the attorney says, “Okay, we need to know your financials, go talk to your accountant.” But like just a regular old accountant doing regular accounting work maybe can't find all of these things. And so how can forensic accountants in this situation really put their mark? How can they help the person?

Tracy Coenen
Certainly traditional accounting services can be helpful in the divorce and can help you understand the money. But those accountants aren't doing the same kind of digging that I am as a fraud investigator. So you're right that I'm doing something a little bit different.

What I do in divorces is I spend a lot of time looking at bank statements, credit card statements, investment account statements, and I am going line by line looking at these transactions tracing the money through these accounts.

And what we see is most of the stuff is pretty routine. I can see your mortgage being paid every month and the electric bill and I can see your dining out and things like that. All of those things are routine.

What I as a forensic accountant am looking for in that next step, however, is those transactions that look questionable or just plain look bad. What looks bad? You know, excessive gambling, strip clubs, pornography online, spending on hotels that may be inappropriate because maybe it's related to an affair, withdrawing cash from an account in large sums of money or transferring to a bank account that nobody-- you know, the spouse didn't know existed, things like that.

I'm looking to identify those kinds of transactions. And that's really the figuring out where the money was.

Steve Altishin
Once you find them, once you find either hidden assets or maybe income...

Tracy Coenen
... hidden rental properties.

Steve Altishin
Yeah, yeah. And where the expenses went up. Once you find all these things, again, I put my place in the client saying okay, now what do I do? I mean, you know, what does this mean? I mean, how is this business worth more than this house? I mean, it's, can you help with sort of what you find that helping them figure out you know, what's important what to do?

Tracy Coenen
Well, if we find that there's been money going out to an account or accounts that we didn't know about, we're going to track that down. So we're going to have the attorney send a subpoena to that bank and get all the bank account records in your spouse's name or business names that your spouse might have an interest in.

And we'll do some work to try to track down those accounts and then look at those statements and figure out what's been going into those accounts and coming out of it, where has that money been spent?

If it's a matter of we found evidence that maybe there's a piece of real estate somewhere, I've had that happen before, where we found a payment that all of a sudden tipped us off that there had to be a piece of real estate, we want to identify that, find out how that was purchased, who owns it, see if that's something that should be part of the marital estate to be divided?

Now, when it comes to the wasteful spending, the non-marital purposes that someone might be engaged in spending for, we're going to look at putting together the proof of that spending. So we decide how far are we going back? What kind of transactions are we looking at? And I'm literally putting those onto a spreadsheet, having all those details there with the account statements behind it as supporting documentation, so that the attorney can present that in court to show the magnitude of what has been wasted at the hands of the naughty spouse.

Steve Altishin
To clarify what we're asking you, which property should I take? Is that in that realm, or is that really more of an attorney or financial planner?

Tracy Coenen
They sometimes do ask me, and I certainly give some feedback on that. What I found is best for those types of things is a financial planner type.

So for example, I've worked a few cases with someone who calls herself a divorce financial strategist. She works all over the country. She used to be a financial planner. She now only does divorce. And she literally works with your attorney to go through what you and your spouse have, and look at different scenarios and figure out what benefits you the most.

If you took this kind of settlement, where are you going to be 10 years from now on your path to retirement or whatever the case may be? So I find those certified financial planners, those certified divorce financial analysts who are in the financial planning area, are really great at that kind of thing.

Steve Altishin
So your work is sort of part of a team with everyone this person may have, including the lawyer and the financial people, tax people.

Tracy Coenen
I do often work as a team. And if you're a client, you're probably thinking that sounds really expensive. And I agree that the more professionals you have involved, probably the more expensive it is going to be on that front end.

But if you have enough at stake in this divorce in terms of your assets, it might very well be worthwhile. You know, if you pay a forensic accountant to do an investigation, and they find $100,000 that you didn't know about, that was well worth your time and money to do that.

So I tell people, let's make careful decisions about how we spend your money and who is on the team. But if it makes sense, it can really benefit you in that divorce.

Steve Altishin
Yeah, it's hard to know when I should hire you only because without that help you're giving me aids, I don't know what I don't know.

Tracy Coenen
Well, here's what I'll tell you, Steve, about the way that I work with clients in my forensic accounting practice. I have been doing fixed fees only for the last 23 years that I've been in business.

So I work with an attorney and the clients to get the overview of the situation, look at some of the financial documents and figure out what do we want to figure out and how are we going to do it, and I come up with a case plan that has a fixed fee attached to it.

So I will do this work that we have determined as necessary, and here's the fee for it for me to do all of it and write an expert report.

But there are lots of cases where we will talk about we kind of have some options. Do we want to do a really deep dive on this? Or do we want to do something more limited, see where that takes us, and then do more?

And I very often-- here's the punchline-- very often I will tell clients, “If this was my divorce, here's what I would do.” And I will make a recommendation. And that recommendation, you know, you always wonder, who do you trust? Are they just trying to get as much money out of me as possible?

I turn down plenty of work. I don't need to have someone do more work than necessary. I will advise them on what I think is the best course of action.

Steve Altishin
What have you, you talk with them, you kind of get a feel and you can kind of figure that either they can't afford it or maybe it just doesn't make financial sense. I mean, maybe they could afford it but maybe like I think I heard you say in a podcast, if there's a $5,000 difference and then they're going to pay $5,000, is it worth it to do that?

But so what if they can't afford it or it doesn't make sense? Are there things you can help them with on their own?

Tracy Coenen
If it doesn't make financial sense to do the work, my potential clients will often hear me saying, “I would be happy to work with you on this and help you. But I'm going to be honest with you that I don't think it makes financial sense to do this.”

If you need to do this project for your own peace of mind and to feel like you did your due diligence before you settle your divorce, I will help you, but I don't think it's worth your money.

So that's a pretty easy conversation to have because I will not mince words about that. If I don't think it's the right way to spend their money, I'll tell them.

If it's a matter of they don't have enough money at stake, or they can't afford it, which I gotta tell you Steve is probably 95% of the divorces that are happening across the country, they can't afford a forensic accountant. They're barely affording their attorneys fees as it is.

And in all these years that I've been doing this work, I felt really bad every time I had to say, “I'm sorry, I can't help you, it's just not going to be affordable for you.” And there really wasn't an option for them.

And their attorneys would say, “Well, I know you have suspicions about the money. But if we can't afford the forensic accountant, we can't look into it.”

So I created the Divorce Money Guide as kind of a do-it-yourself forensic accounting for people who want to get some comfort with the numbers, whether they just haven't been involved with the finances and need to know, or they do have some of those suspicions that potentially their spouse is hiding money or has been engaging in secret spending.

Steve Altishin
Is this part of it, or just part of goes along with it, things you can tell someone maybe to watch out for as they're going through and looking at their stuff? You know, this should jump out to you or here's something you can do to try to find something?

Tracy Coenen
Certainly the first thing that we talked about is red flags of fraud. And we talked about some of the signs that people might see that might tip them off that something has gone wrong with the money.

Now those red flags of fraud aren't proof of fraud, they're just warning signs. Maybe your spouse's behavior has changed, maybe they've started to become much more controlling about money than they used to be. Or maybe they've become more secretive about their behavior. Maybe some financial documents have gone missing, or you've lost your access to online banking and your spouse won't give you the password, things like that.

Those are warning signs, which to me suggests something might be going on with the money.

Now, when you get to actually digging into the finances and you're looking for whether there's proof that money is missing, there are absolutely easy things that I can point people to and that's exactly the point of the Divorce Money Guide.

It's not that Steve, you're going to become a forensic accountant overnight if you use the Divorce Money Guide. Of course not. But I can show you some non-technical things that you can do that can help you uncover some irregularities, which is a nice way to put it.

So let me give you an example because that was going to be your next question, I can read your question.

Here's an easy one. So I'm a big fan of people having paper copies of their bank statements when they're doing this work. So print them out if you've got them on the computer, and take highlighters in different colors. And I assign colors for different things.

And I want you to use a green highlighter and go through and highlight every paycheck on the bank statement for the last 12 months. So look at 12 months worth of bank statements, highlight those paychecks, and then go back and count how many you see.

Most people get paid either 24 or 26 times in a year. If you were to count all of those paychecks and you saw 20 paychecks being deposited, what would that lead you to believe Steve?

Steve Altishin
Well, it would leave me believing somebody's not putting everything in. For me that's right. Somebody's holding money, someone's doing something with it.

Tracy Coenen
That's right. So you didn't have to do the work an accountant would do to count up how many paychecks there were.

And also when I'm having you count them up, you might also see that maybe all the paychecks are there, you see 24, everyone's happy, but one paycheck is about half of the normal amount that's deposited right away. You know there's a problem. There's a question that we need to ask now.

Could it be perfectly legitimate? Sure. Maybe that's the paycheck where you were planning on purchasing a car and needed a down payment for that car. So your spouse went to the bank, deposited half the paycheck, took the other half in a cashier's check that got walked right over to the car dealership, right?

It could be legitimate. But we got to ask the question and ask for the backup documentation.

Steve Altishin
That leads to the discovery process in a divorce. Couples are required to give certain financial information to the other side even without a discovery request, and then discovery can ask for more.

And one of the most daunting sort of things a lot of clients are told early in a divorce by the attorney is, “I need you to get all your financial records.” Can you help them with how to do that?

Tracy Coenen
Of course I can. So part of the Divorce Money Guide is actually a lengthy checklist of all the financial documents you need to think about getting in your divorce.

And then we talk through where do you get them, how do you get them?

What I found, especially when it comes to the bank records and the tax returns, those ended up being some of the most important financial documents in the divorce.

There are people, if you haven't been involved with the finances, there are people who will say, “I don't really know where to start to get the bank statements.” To me it's second nature because I do this all the time.

And I tell people don't be embarrassed. Lots of people need help being pointed in the right direction. So that's what I do, I just walk them through the process.

Here's how you can get your bank statements from your bank. You've got some options.

And then especially with the IRS, one of the things that I see so often in these divorce cases is one spouse holding the tax returns hostage and refusing to turn them over for whatever reason.

Listen, they're discoverable, we're going to get them. Can you just turn them over?

But if they're holding them hostage, all the spouse has to do is go directly to the IRS online, spend 10 minutes registering and validating your identity with the IRS, and the IRS will give you your tax returns right then and there.

You don't have to wait for your spouse to give them up.

Steve Altishin
One of the biggest problems clients report is that “Well, my spouse has that information and I can't get it.” That's really common.

And the other thing that's really interesting, and I'm asking that question, is I think it sounds like you can save money on the divorce because the more the client interacts with the attorney on the financial issues, on getting the stuff, on getting the other person's stuff, on where that might be, that's a big part of an early case and that's where a lot of money goes.

And if you can, it sounds like you kind of step in and help with part of that and maybe reduce some of those attorney fees.

Tracy Coenen
Right, exactly. Attorneys are really great at getting financial documents that you need. But that gets really costly. It's all hourly charges.

So if a client is capable of getting with their bank and getting those bank documents and organizing them nicely and kind of giving that nice little package to the attorney, the attorney doesn't have to spend time sorting through bank statements or trying to get statements.

So it certainly is an easy way. I like to tell clients, you could save a few hundred to a few thousand dollars by getting these documents yourself and organizing them and turning them over.

Steve Altishin
Yeah, absolutely. Do you get people before a divorce, so that there isn't even an attorney involved yet? And someone comes in and says, “I think something's going wrong and I don't know where anything is. How can I protect myself now?”

Tracy Coenen
In a consulting capacity one-on-one, I don't work with clients until after the divorce is filed and they have that attorney retained.

But with the Divorce Money Guide, we do absolutely tell people you can use it even if you aren't sure if you're getting a divorce.

We have people who have gotten into the Divorce Money Guide because they're considering divorce and they want to know what's been happening with the money and they want to protect themselves.

So certainly in the Divorce Money Guide, I walk them through some really important steps for protecting themselves, protecting their private information, protecting their credit, making sure that their spouse can't run up debts that they might be responsible for.

Doing things like running a credit check on yourself so that you know exactly what's out there and connected to your name, getting a brand new email address that your spouse doesn't know about so that you can have absolutely private confidential communications with your attorney without any worry that you've got an email logged in on some laptop in a closet that you forgot about that your spouse could find.

So we talk through all sorts of tips like that.

Steve Altishin
It sounds like, I don't want to say mini, because it's a financial forensic accounting package for people who can't afford the full-blown one. And almost anyone in a divorce could benefit from this.

Is it a one-time thing? I mean, you send them something and then they're on their own? Or is this something that you stay with them for a while on?

Tracy Coenen
What we've got is the Divorce Money Guide itself, which is an online learning platform.

So I've got videos and ebook worksheets, checklists to help people. It's a one-time fee, they have lifetime access to it, come back and watch the videos or access the materials whenever you want and walk yourself through the process.

For the people who feel that they need a little extra guidance, we have an option that includes the Divorce Money Guide plus group coaching.

So for eight weeks, you get to be part of a private Facebook group. You can be there with your real name or with a fake name, we don't care.

But you'll get more weekly content. So I do videos every week taking them through some of the finer points of the Divorce Money Guide. Or if someone has asked me a question, “How do I do this thing?” I will do a video that week on it so everyone can learn how to better do something.

So I walk them through a lot of stuff, give them a chance to ask Tracy anything about divorce finances, about their specific situation.

So that's a way for people to get some extra support as they go through the process.

And then we also recently launched a one-on-one option where if you really have a complicated situation and need some extra extra help and want to have access to me with some one-on-one private strategy sessions and things like that, there's that option as well.

Steve Altishin
Wow, that sounds like something I had not heard of before.

Tracy Coenen
It's brand new!

Steve Altishin
Yeah, yeah, the term forensic accounting strikes fear in everybody because of the complications and the huge cost of it. It just sounds like something that if the size of the entire divorce isn't worth full-blown accounting, this absolutely can be.

And so what I'd really like to do now, because of course we're running out of time, is to talk about how someone can get ahold of you or get connected with you.

Tracy Coenen
Absolutely. They can go to fraudcoach.com because I am your fraud coach.

And that's where you're going to find everything about the Divorce Money Guide and some other products that I have on that fraudcoach.com page.

If you look at the very top of it, there is a link there for something called the Red Flag Assessment.

It's 15 questions, a short quiz that you can take if you've had some concerns about what's been going on with the money in your marriage.

I'm going to ask you some questions about what has been going on, what have you seen, some of those red flags that we see so commonly.

And when you're done, I will return a result to you that will tell you how worried you should be, whether it looks like things are probably okay with your money, or you should be concerned and really think about digging into the finances.

Steve Altishin
Wow, that just sounds really, really helpful for a lot of people.

I am out of time. You had tons of great information here. And I really want to thank you, Tracy, for sitting down and talking about this because this is complicated technical stuff and you made it understandable and informative. And even people like me can understand it. So it's gone a long way. So thank you for being here today.

Tracy Coenen
I love it. Thanks for having me. I'm just so happy to be able to share options for people.

Steve Altishin
Oh, and that's what really makes this so cool. It's another option that didn't exist. And we need more of those kinds of things.

So everyone else, thank you for joining us today. Anyone who has any further questions on today's topic, you can also post it here and we can get you connected with Tracy.

So until next time, stay safe, stay happy and be well.

Outro:
This has been Modern Family Matters, a legal podcast focusing on providing real answers and direction for individuals and families. Our podcast is sponsored by Pacific Cascade Legal, serving families in Oregon and Washington.

If you are in need of legal counsel or have additional questions about a family law matter important to you, please visit our websites at pacificcascadelegal.com or pacificcascadefamilylaw.com.

You can also call our headquarters at (503) 227-0200 to schedule a case evaluation with one of our seasoned attorneys.

Modern Family Matters, advocating for your better tomorrow and offering legal solutions important to the modern family.