Are you staring an Illinois divorce and worried your spouse is hiding money, or abnormally wasting money of frivolous things? If so, you are not alone.
As a divorce lawyer who handles high net worth divorces in Chicago, I’ve seen cases that involve spouses trying to hide multiple millions of dollars. But on the other hand, I’ve also seen my own clients falsely accused of hiding or wasting millions.
Check out this FAQ about hiding money in an Illinois divorce.
Is trying to find money worth it?
If your spouse is hiding money, you might be pretty mad about it.
In fact, maybe you should be mad about it.
But realize this:
Even if you should be mad, and you are mad, that doesn’t mean that you should actually try to find the hidden money.
For example, if your spouse hid a maximum of $10,000, then you probably shouldn’t spend $15,000 trying to find the hidden money. Even if you were successful in convincing a judge that your spouse dissipated $10,000, your share of that money might be only $5,000. So you see, you would have spent $15,000 to recover only $5,000 – not a good deal.
As a divorce lawyer who handles high-net-worth cases, I feel responsible for helping my client’s avoiding wasting money. It’s about return on investment.
What should I think about when considering hidden money in an Illinois divorce?
Here are some questions to ask yourself when thinking about whether or not to try to find hidden money in an Illinois divorce:
- How much money do I think is hidden?
- What is the likelihood of finding the money?
- Are the relatively inexpensive things we can to as a preliminary investigation?
- Do I care about the hidden money?
- What if trying to find hidden money prolongs my case?
What if money is held in cryptocurrency?
Maybe you’ve heard of cryptocurrencies such as Bitcoin, Ethereum, and others. If you have, then you know that people like to use cryptocurrency to hide money.
Finding cryptocurrency can be difficult, but it can be done. And if it cannot be done, then it is sometimes possible to estimate how much cryptocurrency might be out there.
For example, I recently had a high-net-worth case where the sociopathic husband failed to report all his assets on a financial affidavit used in the divorce (click hear to learn more about financial discovery).
I discovery that he had purchased cryptocurrency – around $30,000 worth of it – by inspecting his bank records. Even though the guy was trying to hide his cryptocurrency assets, he was dumb enough to transfer funds from his bank account to Coinbase, a well-known cryptocurrency brokerage. He also used credit cards to purchase cryptocurrency.
Long story short, I followed the money trial, and that lead to discovery of his cryptocurrency account and more than $30,000 of cryptocurrency.
Needless to say, my client was very happy.
What if there are secret accounts?
In a divorce, people are supposed to disclose every account they have to the other side. But sometimes they don’t.
Hidden accounts usually are not islands. In other words, they don’t just exist out there, all by themselves. Sometimes, I can find a hidden account by following a money trail to that account.
Here are some examples of money trails that can lead to hidden accounts:
- Funds are transferred to/from a known account to the hidden account
- Funds are transferred via direct deposit to a hidden account, as indicated by a paystub
- Credit card bills or other debts are paid by hidden accounts
How can cash be found?
Cash can be hard to find.
Here are some ways cash can be found:
- Hidden in a ceiling (no kidding)
- Safety deposit boxes
- In secret accounts
- “Stashed” on prepaid credit cards
Cash is one of the hardest assets to find since it can be put anywhere. But usefully, it comes from somewhere, and if that source can be found, the amount of cash in hiding could be estimated.
How can I prove my spouse hid money?
One of the hard things about court is that things have to be proven. Getting your lawyer to believe you is not the same as proving something in court.
I often have cases where clients spend a lot of time trying to convince me of certain things. But the important thing is doing what needs to be done to prove a claim to a judge.
Here are some ways one can prove a spouse has hidden money:
- Find secret accounts
- Find money transferred to a family member for no reason
- Estimate hidden money by using cash withdrawals from bank statements
- Find actual currency hidden somewhere, like a safe or under the mattress
- Hire experts, like forensic accountants, to search for all of the above (expensive)
It can be very hard to prove that someone hid money. Sometimes it might seem like there is a enough evidence to prove someone hid money, but the judge might disagree. In a case like that, the judge wins.
Does it always make sense to go after hidden money in an Illinois divorce?
There is a balancing act between doing nothing to find hidden money, and wasting too much money trying to find hidden money. If investigative and legal work were free, people could do unlimited work to follow a money trial wherever it goes, and everyone could hire forensic accountants to scour financial records.
But unfortunately, people do not have unlimited money. And if they did, it wouldn’t make sense to inefficiently spend money to find a smaller amount of money.
It is also important to keep in mind the limits set by the proper status, and the procedure required to pursue a dissipation claim. Section 503(d)(2) of the Illinois Marriage and Dissolution of Marriage Act explains some of the procedural aspects of going after dissipation, but getting into the finer points is beyond the scope of this article.
What if money is wasted, not hidden?
Hidden money is one thing. Handling money that is wasted is another.
One on hand, a spouse cannot control the other spouse’s spending in every single aspect.
But that doesn’t mean that one person gets to spend marital money on anything he or she wants. For example, if a guy secretly cheats on his wife and secretly buys his girlfriend a condo in the Loop, the guy’s wife could essentially get paid back for that money the husband “wasted” on the girlfriend.
In the context of a divorce in Illinois, the act of wasting marital money is called “dissipation.”
Dissipation is defined by the Illinois Supreme Court as “a spouse’s improper use of marital property during the time in which the marriage is undergoing an irreconcilable breakdown.”
The definition of dissipation does get a bit technical in that people can always argue about what is meant by the term “improper,” and it is common for people to fight about whether or not the marriage was undergoing an “irreconcilable breakdown.” But the main point is that it is possible for one spouse to recover funds wasted by the other spouse, and the way to do that is to prove “dissipation.”
What can I do if I think my spouse is hiding money in an Illinois divorce?
As an Illinois divorce lawyer, I’d like my client to keep in mind the following points when starting an Illinois divorce that might involve hidden assets and dissipation.
- Estimate how much money was hidden or wrongfully spent
- Prepare a list of accounts that contained the hidden money, or money that was wrongly spent
- Understand that tracking and tracing hidden money can be very expensive, and make a case take a vary long time
- Keep in mind that while your spouse may have hidden or wasted marital assets, you might want to let it slide. Pursuing hidden or wasted marital assets can cost time, money, and cause anxiety.
If you are ready to start an divorce in Illinois, please contact an Illinois divorce lawyer who will honestly advise you about going after hidden or wasted marital money. You don’t want someone just amping you up with the goal of billing excessively by expanding the scope of your case.