In some cases during a divorce, a spouse may attempt to hide certain assets prior to or during a divorce to prevent sharing them. However, the other spouse often has the chance to use legal tools referred to as “discovery” to assist them in finding these hidden assets and income.
Finding Hidden Assets
To make sure that all assets are accounted for, each spouse should create a categorical list that includes all property. The list should be categorized as “marital” assets (property obtained throughout the marriage), “separate” assets (property obtained prior to the marriage, following separation, via inheritance, or as a gift), and “commingled” assets (a mix of marital and separate property in retirement funds or bank accounts, for example).
Illinois law can help determine how spouses should characterize assets.
Uncovering Assets as the “Out-Spouse”
Individuals who left bookkeeping and finance tracking to the other spouse are often referred to as “out-spouses.” These spouses simply don’t have knowledge of or general access to financial information that the other spouse possesses.
Out-spouses can ask the other spouse to disclose all financial records, but if he or she refuses to disclose this information or is suspected of withholding assets, an attorney may be required to help the out-spouse uncover them through the discovery process.
This process will entail several steps including:
- Demanding the spouse to provide specific documents such as financial statements and tax returns
- Asking “interrogatories,” or written questions that the other spouse is required to answer in written form or admit certain statements the “out-spouse” believes to be true
- Demanding an inspection of the property to find hidden assets
- Requiring a testimony under oath, in which the spouse suspected of hiding assets must swear to tell the truth and answer questions honestly
Consequences of Hiding Assets
While it is common for many spouses to hide assets in an attempt to avoid sharing them, this practice is illegal. When a spouse signs the Financial Affidavit that is required in every divorce, he or she is swearing under oath to tell the truth. Any discovered dishonesty could result in perjury charges. Punishment could range anywhere from hefty fines to jail time in addition to the forced transfer of assets to the other spouse.