Asset Tracing in a DuPage County Divorce

 Posted on November 23, 2022 in Divorce

Hiding assets is a maneuver sometimes employed by a spouse engaged in a divorce, especially a contentious and complex high-net-worth one. Asset tracing is valuable property identification that a divorcing spouse wishes to uncover from the offending spouse. Concealing assets, like income, debt, and property, during divorce proceedings is illegal. Still, this deception is commonplace and usually infringes on the non-contributing spouse.

According to the National Endowment for Financial Education, 31 percent of married couples have deceived their spouse about finances and property. An average of 58 percent hid money, 54 percent hid a purchase, and 30 percent hid financial statements or bills from their spouse.  An average of 34 percent surveyed have lied to their spouse about their income. A divorce attorney proficient at tracing assets can uncover hidden assets and help procure an equitable settlement. 

Ten Common Ways a Spouse Can Hide Assets

A divorcing spouse is likely to hide assets from their spouse out of spite or greed, particularly if the divorce is acrimonious. In some marriages, one spouse may handle the family finances. Such circumstances enable the concealing of assets to be simple and uncomplicated. A financially ignorant spouse, especially a non-contributing one, should seek counsel skilled in asset tracing. The following are some of the many ways in which assets are hidden.

1. Intentional concealment – Purposely neglecting to reveal annual income and net worth or falsely stating a reduced salary throughout divorce proceedings is the most common way to hide assets.  

2. Prepaying the IRS – Paying more taxes than due is a tactic for the offending spouse to retrieve a large refund after the divorce.  

3. Loans – Paying off personal loans, like a college loan, with comingled money before the divorce is a means to hide assets. Another typical scheme entails loaning friends large sums of money that is then recouped after the divorce is finalized.

4. Dissipation of assets – Intentionally wasting money by gambling or spending on a paramour before the divorce is final is a method of concealing assets.  

5. Exaggerating expenses – Concocting inflated charges and debts falsely demonstrates a marginal financial position.

6. Banking manipulation – Covertly transferring funds from a joint account to a personal one or opening secret accounts like an offshore one is effectively stealing. 

7. Expensive purchases – A spouse might purchase costly items, like a painting or antique lamp, in cash, and then reselling the assets after the divorce is a frequent ploy.

8. Investments – An offending spouse may invest in the stock market, real estate, or start-up businesses with marital money.  

9. Undervaluing marital assets – The culpable spouse might devalue marital property, such as art, furniture, or jewelry, to conceal worth.

10. Business manipulation – Delaying a business promotion or a bonus until after the divorce is a tactic of concealing income. Owning a family business can also enable a guilty spouse to hide funds by forging financial reports.

How is Asset Tracing Executed?

Asset tracing entails the identification, investigation, and valuation of an asset. Divorcing spouses who suspect their spouse of hiding money or property necessitates asset tracing. An asset tracing attorney may employ the expertise of a forensic accountant who can assist in identifying, auditing, and recovering the assets from the liable spouse. Forensic accountants are beneficial as they can provide testimony clarifying their tracing methods, which could include but are not limited to the following.

• Implement depositions – This entails a spouses courtroom testimony that can be revisited throughout the divorce proceedings.  

• Interrogations – The culpable party is interrogated under oath with inquiries about finances.   

• Petition financial statements – The offending spouse is required to provide lawyers and investigators with tax returns, bills, and paychecks.  

• Investigate digital paper trails – An asset tracer scrutinizes emails and electronic bank statements and bills to expose fraud.

• Subpoenas – This court order obliges the offending spouse, workplace, or family company to provide financial statements or testimony.

Contact a DuPage County Divorce Attorney

At Pesce Law Group P.C., a full-service family law firm, our focused and results-oriented lawyers aggressively advocate for fair and just solutions. We treat our clients with dignity and respect and are determined to uncover deception while mitigating spiraling acrimony. Pesce Law Group P.C. offers convenient payment plans. If you feel your divorcing spouse is hiding assets, contact a Naperville asset tracing attorney for a free consultation at 630-352-2240.

Sources:

https://www.forbes.com/sites/jefflanders/2012/11/14/what-are-the-consequences-of-hiding-assets-during-divorce/?sh=6c374f20190c 

https://web.law.columbia.edu/sites/default/files/microsites/public-integrity/files/what_is_asset_tracing_-_capi_issue_brief_-_august_2016.pdf#:~:text=To

https://www.investopedia.com/terms/f/forensicaccounting.asp