Divorce and Hidden Assets in a word cloud. Hidden assets in divorce
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How to Find Hidden Assets in Divorce

Finding hidden assets in divorce often involves your own research and professional expertise, such as that of a forensic accountant. Often, the first step involves one spouse noticing changes in spending patterns or even looking at tax returns and inadvertently discovering previously unknown sources of income. The income could be from a source close to home in Chicago or Des Plaines, or from across the world. Bank account and credit card statements can be revealing, too.

Discovering Hidden Assets in Illinois Divorces

It is fairly common for spouses to hide assets in a divorce and not share them on financial disclosure documents. They may do so for varied reasons, such as wanting to keep more for themselves or wanting to avoid reasonable spousal maintenance.

Whatever the reason, it is illegal to hide assets like this. The advent of technologies such as cryptocurrency has only added to the ways in which spouses can attempt to conceal assets.

Examples of Hidden Assets

Crypto is a good example of an asset that many spouses try to hide because it is still relatively new and hard for non-experts to track. However, there are certified cryptocurrency forensic investigators who can help.

Hiding can even occur with assets you know about. For example, your spouse may underrepresent the value of assets such as art, jewelry, tools, and antiques. Professional valuation of these assets can help solve discrepancies.

Cash is a common hidden asset in divorce. Spouses may try to hide it through bank transfers to other parties and new bank accounts (even sometimes putting it in a new bank account for the children). Some spouses try to hide cash by saying they are paying an old debt. The debt never existed, though, and the plan is for the friend or relative to return the money after the divorce.

Delayed compensation is another tactic. Spouses may ask their employers to delay bonuses or raises until after the divorce is finalized.

Gather Documentary Evidence

Your Illinois divorce checklist likely includes steps related to gathering various documents. Paperwork, such as income tax returns, can be invaluable in finding hidden assets. Keep an eye on refunds because your spouse may be trying to overpay. His or her hope may be to get the money back later in the form of a refund.

Going deeper, look at W2s for salary details and information on deferred compensation or benefits. For more details, look at Form 1040. It covers all types of income, including wages, investments, and Social Security.

  • Schedule A: You might see interest deductions that signify loans exist for an asset you did not know about.
  • Schedule B: Interest and dividend income might point to offshore accounts or trusts previously unknown to you.
  • Schedule C: You could discover discrepancies in business profits or losses.
  • Schedule E: This form gives you information on real estate, royalties, trusts, and other income-generating assets.

Other documents that help with how to find out if your spouse is hiding assets include bank account paperwork and investment account paperwork.

Analyze Lifestyle Discrepancies

Some spouses have discovered hidden crypto due to suspicions that arose when a spouse’s lifestyle did not match his or her stated income. Lifestyle patterns can be revealing.

Signs of Hidden Assets Based on Lifestyle Patterns

Signs include changes in spending habits and noticeable drops in the income your spouse reports. For example, lavish spending could be an attempt to mask assets or get rid of them. A drop in income could point to underreporting. Making transfers and gifts to family members is a common indicator, too.

Benefits of Working With a Forensic Accountant or Financial Professional

Forensic accountants typically conduct a lifestyle analysis. They have the training to track down and value hidden assets to ensure a fair and equitable division of property.

Uncovering Hidden Assets Through Discovery Methods

“Dissipation” is a term that comes into play with the suspicion of hiding marital assets. It occurs when a spouse wastes, hides, or destroys property after the fact of a divorce is clear. It is illegal.

Courts in Chicago or Des Plaines, IL, need three main pieces of information to determine whether dissipation could be happening. First is the date the marriage became “irretrievably broken,” with separation inevitable. Next are specifics on the property dissipated, and then the time period the alleged dissipation occurred.

With this information, your lawyer can file for discovery on this specific issue, but must do so no later than 60 days before trial or 30 days after the end of another discovery. After the filing, it becomes your spouse’s burden to prove where the money went.

Legal Actions to Protect Assets

Your divorce lawyer has several potential routes. For example, a subpoena to a third party could prove fruitful. If you suspect your spouse has accounts at certain banks, a subpoena obligates the bank to produce all records associated with your spouse’s name.

Attorneys work with forensic accountants and others to track down hidden assets in divorce. If your spouse has hidden assets extremely well, this level of expertise could be necessary.

Offshore bank accounts are a popular haven for liquid assets, and tax records may give some hint of their existence. The legal steps available depend on the laws of the country where the bank is.

Equitable Distribution in Chicago of Discovered Hidden Assets

Illinois is an equitable distribution state. That means courts aim to divide assets fairly, or equitably, rather than 50/50.

However, discovered hidden assets in divorce typically get different treatment. Because a spouse has taken steps to conceal them, the spouse should not be rewarded. Thus, he or she usually won’t be entitled to an “equitable” distribution of these assets. Depending on the severity of what happened, previously hidden assets could be given in full or in large part to the spouse who was not doing the hiding.

Divorce and Hidden Assets in a word cloud. Hidden assets in divorce

He helps clients resolve issues relating to family law, including divorce, parenting time and parental responsibilities, paternity, and child support. As a skilled real estate attorney as well, Scott also provides advice and legal representation to clients who are purchasing or selling residential or commercial property in Illinois.

Years of Experience: Approx. 30 years
Illinois Registration Status: Active
Bar & Court Admissions: Illiois Courts Northern District of Illinois Federal Courts Illinois State Bar Association Chicago Bar Association

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