Financial conflict is often a major contributor to marital strife in the first place. When facing divorce, either spouse may have strong emotions about what assets he or she deserves to keep.
Unfortunately, whether out of feelings of resentment, animosity or anxiety about their own financial future, spouses sometimes try to hide assets from their ex and from legal scrutiny to avoid a court-ordered division of money and property.
Marital assets and equitable distribution
Illinois is an “equitable distribution” state. With few exceptions, all assets and debts acquired during marriage become marital property and belong equally to both spouses, regardless of who made the purchase or whose name is on a title or account. Upon divorce, all marital property is subject to equitable division by the court.
Ways that spouses hide assets
Prior to or during divorce, a spouse may try to hide, spend or even destroy marital property to avoid legal distribution. Common examples include:
- Transferring assets to a third party
- Overstating the cost of housing, child care, travel and other expenses
- Claiming an asset does not exist
- Making large cash purchases
- Retaining assets in a business
- Opening an account in a child’s name
Penalties for hiding assets
During a contested divorce, each spouse has a legal obligation to disclose all assets, including both marital property and assets owned separately. From document subpoenas and depositions to the aid of forensic accountants, there are many ways for an opposing attorney or the court to discover undisclosed items.
In addition to potential charges of contempt of court and/or perjury, hiding assets may lead the court to award a larger portion of the estate to the other spouse, including some or even all of the concealed property.