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1776 S. Naperville Road, Building B, Suite 202,
Wheaton, IL 60189
The Stogsdill Law Firm, P.C.

DuPage County property division lawyer for hidden assetsMany of the important issues raised in a divorce involve financial matters. In order to equitably divide marital assets and debts, determine a spouse’s child support payments, or establish spousal maintenance, a truthful and complete account of both spouse’s finances is needed. Spouses are expected to disclose all sources of income or revenue during divorce. However, some spouses lie about their income and assets. They may underreport income or hide sources of revenue in an effort to gain an advantage during the divorce or avoid paying their fair share of support. If you are worried that your spouse will hide income or assets during your divorce, it is important to speak with a divorce lawyer experienced in uncovering hidden assets right away.

Gathering Financial Information During Divorce

As one of the initial steps in the Illinois divorce process, spouses are required to fill out and submit financial affidavits. These documents should list the spouse’s income, property, debt, and expenses. A spouse who wants to manipulate the outcome of his or her divorce may “forget” to include certain assets or sources of income on the financial affidavit. He or she may also overstate debts or expenses, create fake debts, or falsify business revenue. Lying on the financial affidavit may lead to sanctions or even criminal penalties.

Finding Hidden Assets and Unreported Income Through Discovery

There are several different stages of a divorce case. One of these phases is referred to as the “discovery phase.” During discovery, the spouses and their attorneys gather facts and information that are relevant to the case. Your attorney may use a variety of techniques to uncover financial information. Written interrogatories may be used to formally request information about assets and income. Requests for production may be used to make your spouse surrender copies of tax returns, bank statements, and other financial documents. Depositions, or meetings in which parties are asked a series of questions under oath, are also often used to investigate a spouse’s financial situation. Statements made during a deposition may be used in court to confirm the facts of the case or add credibility to an argument.

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DuPage County property division lawyer for hidden assetsWhen two people join their lives in marriage, “yours” and “mine” become “ours.” According to Illinois law, spouses have the right to an equitable division of marital assets during divorce. Any property that was accumulated during the marriage by either spouse is part of the marital estate and subject to division. This property may include household items, jewelry, vehicles, and other physical property, as well as retirement accounts, investments, business interests, and other complex assets. Spouses who do not want to share the marital estate fairly may try to manipulate the asset division process during divorce by hiding assets or property. Some of the most common methods of concealing assets include:

Underreporting Income and Business Revenue

Divorcing spouses in Illinois are required to fill out a financial affidavit that lists their gross income, expenses, debts, assets, health insurance information, and other financial data. One of the easiest ways to hide assets during a divorce is for a spouse to simply lie about his or her finances. Spouses may fail to disclose bank accounts and funds or undervalue the worth of their business, investments, or other assets. Business owners may use cash transactions, omit financial transactions from business records, delay the receipt of client payments, create fake expenses and debts, pre-pay vendors, or take other actions to make a business appear less successful than it really is.

Temporarily Transferring Assets to Another Party

Some spouses may attempt to reduce their net worth prior to divorce by transferring assets to other people or organizations. For example, they may lend cash to friends or family members with the understanding that the person will return the money after the divorce is finalized. They may also use the IRS as a means of temporarily reducing their assets. A spouse may intentionally overpay his or her taxes knowing that the IRS will refund the overpayment through his or her tax return. Expensive items like art, antiques, or jewelry may also be used to artificially lower a spouse’s net worth. A spouse may buy an expensive, hard-to-value item and then report the item’s value as much lower than it actually is on their financial affidavit. After the divorce, he or she will intend to sell the item and recover the money.

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The division of assets in divorce is generally thought of in tangible terms - bank accounts, retirement accounts, and real estate. Yet intellectual property, such as software, copyrights, and trademarks can carry value as well - and they are becoming more and more common in divorces. So how, exactly, do you value these intangible assets? The following explains.

Intellectual Property Often Overlooked in Divorce

Although intellectual property can have significant value, it is often overlooked in the process in divorce. This is due, in part, to its intangibility. However, it is also an issue because the asset is often "hidden" during the divorce proceedings. In some cases, it is out of mere oversight or ignorance. In others, it is an intentional act, used to reduce the payout to a deserving spouse. This can be especially problematic when the disadvantaged spouse is not even aware of what was created by their creative, tech-savvy, or inventive spouse. Reduce the risk by ensuring you have an experienced divorce lawyer on your side.

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When going through divorce, most people would like to believe that their spouse still values their marriage enough to be honest and fair in their disclosure of assets and income. Unfortunately, this is not always the case. No one really knows how often it happens - after all, many do end up getting away with it - but the issue is common and one that you should be aware of. Learn more with help from the following information on financial fraud in divorce.

Types of Financial Fraud in Divorce

While some forms of financial fraud are more common than others, a spouse can become victim to one or numerous types throughout the course of their marriage or divorce. This can include tax fraud, asset dissipation, asset hiding, misappropriation of assets, forgery, loan fraud, insurance fraud, and more. Parties who are especially at risk are those that have not had an active role in the day-to-day financial management of the marriage. Even still, it is possible to spot the signs if you stay aware and know what to look for during your divorce.

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For some couples, the path to divorce is fairly peaceable. They know their marriage is ending, may even remain friends, and simply want to move on with their lives. For others, the process is contentious. They may bicker over seemingly trivial issues because they feel hurt or betrayed. One or both parties may seem greedy, petty, or spiteful. Such divorces can become so ugly that things - assets, money, furniture, artwork, and other things of value - start to disappear. This is known as a dissipation of assets.

Are Your Marital Assets Being Wasted?

Spotting a dissipation of assets might seem like a simple, straightforward, and easy thing to do. After all, if there is money missing, then it would make sense that it is being wasted. However, this is not always the case. In fact, there are many ways to secretly or covertly drain assets. Examples might include going to strip clubs, which typically have bland names to "preserve privacy of their patrons," running up credit card debt, or withdrawing money directly from an account to prevent tracking. In all of these situations, and any other similar situations, it is critical that you contact an experienced attorney for assistance.

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