In an Illinois divorce, each spouse has a legal obligation to provide financial information, such as their income, resources, assets, and debts. Unfortunately, some spouses purposefully do not disclose certain assets and resources. If you are entering divorce proceedings and you believe your spouse is hiding assets, you need to work with a qualified divorce attorney who has experience with the divorce discovery process and hidden assets.
Unfortunately, when a spouse hides assets, it can lengthen the cost and time of divorce. Experienced legal representation can help you navigate investigations, work with financial professionals, and gather information through discovery. Hidden assets can impact several parts of a divorce, including property division and spousal support, leaving you with fewer resources than you should have.
Why Do Spouses Hide Assets?
Hidden assets are more common in high-asset divorces or in contentious divorces. A spouse may have many different motivations when they purposefully conceal marital assets. They may do it out of spite towards the other spouse or to prevent the other spouse from obtaining specific marital assets. They may also wish to receive more assets than their spouse.
Because Illinois is an equitable distribution state, spouses can also conceal separate assets and impact the divorce as a result. If the divorce is handled through the family court, the judge on the case will consider several factors when determining how to split marital assets, including the separate financial resources of each party. A spouse may conceal their own assets from financial disclosure in order to appear to have fewer resources and gain more marital assets.
How a Spouse Could Hide Assets
Spouses may begin to hide assets before the divorce is even filed or during divorce proceedings. There are several potential ways a spouse may hide assets, including:
- Delaying income, business agreements, bonuses, or raises until the divorce is finalized so it is not included in their assets
- Providing fake loans or gifts to friends, relatives, or other third parties, with the expectation of receiving those assets after the divorce
- Creating a retirement account, secret trust, or similar account to hide assets that their spouse is unaware exists
- Creating another bank account that they place marital assets into
- Making any large and unknown withdrawals from marital accounts to put into other accounts or items
- Undervaluing a business or high-value assets to hide income
- Buying expensive items with assets to purposefully undervalue them
- Creating accounts listed under a child’s name so the assets are not marital property
- Failing to report cash income from their work
- Overpaying the IRS with the intention to receive a high tax return
- Transferring funds into a business
These are potential warning signs that a spouse is hiding and transferring assets, but there are many other signs. When a spouse suddenly becomes secretive about the finances, this may be a sign they are hiding assets. If you do not have full access to marital and separate accounts, it is often easier for a spouse to successfully hide assets. If you suspect your spouse is hiding assets during divorce proceedings, it is essential to discuss the situation with your attorney.
How Does an Attorney Help Find Hidden Assets?
An attorney will most commonly use the formal process of discovery to find hidden assets. This is a court-ordered process with legal consequences if a spouse lies or conceals financial information. Discovery includes tools like interrogatories, document requests, deposition hearings, and subpoenas, which are all useful for uncovering hidden financial information and discrepancies. If a spouse refuses these tools, the court can enforce the request.
If your spouse is determined to be hiding assets during formal discovery, they may face criminal consequences. You may also receive more assets during the property division.
Q: What Is the Penalty for Hiding Assets in a Divorce in Illinois?
A: If a spouse is discovered to have purposefully hidden marital or separate assets during an Illinois divorce, there may be civil and criminal penalties. Depending on the situation and discretion of the judge, this may include:
- All hidden assets are awarded to the other spouse
- The spouse who hid assets may be required to cover the costs of the other spouse’s legal fees
- The other spouse receives a larger portion of marital assets
- The spouse who hid assets may face contempt of court criminal proceedings
Criminal proceedings could result in fines and even jail time.
Q: What Happens When a Spouse Hides Money During a Divorce?
A: In a divorce, each spouse must provide a full picture of their finances. This is a legal requirement during the formal divorce discovery process. A spouse who hides assets may face contempt of court proceedings and both civil and criminal penalties. When spouses agree to an informal discovery process, a spouse who hides assets can still face consequences if their actions are discovered. In an equitable distribution state, the court may award the harmed spouse with more assets.
Q: What to Do if You Suspect Your Spouse Is Hiding Money?
A: If you and your spouse are not divorcing, it is not inherently illegal for a spouse to hide money and assets. If you and your spouse are going through the divorce process or have filed for divorce, hiding assets is fraud. If you have discussed divorce but have not yet filed, and you suspect your spouse is hiding assets, you want to ensure you talk with your divorce attorney.
Depending on where you are in the divorce process, you may be able to request formal discovery proceedings to seek out evidence of hidden assets.
Q: How Can I Find Out If My Ex Is Hiding Money?
A: If you have legal access to bank accounts, tax returns, receipts, and other financial information, review that information for transfers, discrepancies, and other information that may suggest hidden assets. Common signs of hidden assets include large purchases that a spouse then undervalues, transferring items to other accounts, and overpaying on their taxes.
If you cannot find this information or do not have access to these accounts, your divorce attorney can help you navigate other methods, including divorce discovery.
Protecting Your Financial Interests
A divorce alters your finances considerably due to the expensive process and assets division. It’s incredibly important to protect yourself from financial harm. Contact Stange Law Firm to see how our divorce attorneys can help you navigate potentially hidden assets in your divorce.