Divorce can be a difficult process. During the end of your marriage, you may not only need to address the emotional and personal concerns that have led to the breakdown of your relationship, but you may also need to deal with a variety of complex financial issues. As you handle the legal aspects of your divorce, some of your most important concerns may be related to ensuring that all assets are properly identified and divided between you and your spouse. However, there are some factors that can complicate this process, including suspicions that your spouse has hidden assets from you or taken actions to waste or destroy marital property.
Attempts to hide or waste assets in order to prevent them from being included in the division of property can have serious consequences for both parties. If you suspect that your spouse has engaged in this type of behavior, you will need to understand the steps you can take to address your concerns and protect your financial interests. At [[title]], our attorneys understand the methods that may be used to uncover financial deception by divorcing spouses, and we work to ensure that assets are divided correctly. We can provide guidance on the best ways to handle financial concerns, and we will advocate on your behalf as you seek to resolve disputes during your divorce.
The Importance of Full Financial Disclosure
During a divorce, both spouses are required by law to provide each other with a full disclosure of all relevant financial information. This means that each party must disclose all sources of income, expenses that need to be paid, debts that are owed, and all assets they own, including both marital assets and separately-owned property. Unfortunately, not everyone adheres to this requirement willingly. To gain a complete understanding of the financial concerns that must be addressed during your divorce, you will need to complete discovery.
What Is the Discovery Process?
Discovery refers to the methods used by divorcing spouses and their attorneys to obtain relevant information from each other regarding their finances or other aspects of their marriage that may play a role during the divorce process. Discovery helps ensure transparency and fairness during divorce proceedings by giving both parties access to all necessary financial and personal records.
The primary goal of discovery is to obtain complete and accurate knowledge about the assets you own, the income you and your spouse earn, and the debts you owe. By accessing financial records and other relevant information, you will have a full understanding of the marital assets you have acquired during your marriage, any separate assets that are not included in the marital estate, all debts you and your spouse owe together or separately, all income sources, ongoing expenses that will be required going forward, investments, business ventures, or anything else that could have an impact on the outcome of your divorce.
Types of Discovery Methods
There are several different methods that may be used during the discovery process. Depending on the specific circumstances of your case, your lawyer may engage in some or all of the following activities:
Interrogatories: Each party’s attorney may send written questions to the other party, who must answer them truthfully. These questions may cover issues such as sources of income, property that a spouse owns or controls, or assets that are co-owned with other parties.
Requests for production: Each party may request documents related to assets, debts, or expenses, such as bank statements, tax returns, employment records, etc. This can help determine the extent of a couple’s financial resources while also providing information about ongoing expenses and debts.
Depositions: One party’s lawyer may ask the other party questions under oath. A court reporter transcribes the entire conversation, and the answers given may be submitted as evidence in court. This can ensure that truthful answers will be provided about issues such as income, assets, and debts.
Subpoenas: An attorney may take steps to obtain information from third parties who may have relevant documents or knowledge about financial issues that affect the parties in a divorce. Subpoenas may be sent to employers, financial institutions, business partners, or others, and these people or companies will be legally obligated to turn over the requested information or answer any pertinent questions.
The Court’s Role in Discovery
The discovery process plays a critical role in a divorce because it ensures that both parties have access to all necessary information before making decisions that could impact their future financial well-being. Because of this, divorce court judges will seek to ensure that the discovery process can be carried out correctly. A judge will ensure that both parties comply with all rules and guidelines governing discovery. They have the authority to intervene if either party fails to provide information as required.
If one spouse refuses to comply with discovery requests, sanctions may be imposed by the court, including penalties such as fines or the requirement to pay the other party’s legal fees. A spouse’s non-compliance may also be a factor that could affect decisions about asset division, spousal support, or other aspects of a divorce.
What Is Asset Dissipation?
Asset dissipation is one of the key issues that may be uncovered during discovery and addressed during the division of marital assets. The dissipation of marital assets refers to the wasting or depletion of money or property by one spouse. In Illinois, asset dissipation is defined as any use or misuse of marital assets by a spouse for their sole benefit and for purposes unrelated to the marriage. Asset dissipation may occur at any point after a marriage begins to suffer an irretrievable breakdown.
There are multiple ways a spouse may dissipate marital assets. In some cases, they may do so with the intent to cause the other spouse to suffer financial harm. In others, they may be acting to benefit themselves without considering how their spouse or other family members will be affected. Dissipation may include actions such as intentionally damaging or destroying property, spending money on a gambling habit or drug addiction, using marital funds to have an affair, selling valuable assets at significantly reduced prices, or attempting to hide or conceal assets in order to misrepresent the value of the marital estate.
Proving Asset Dissipation
The dissipation of assets can affect your ability to divide your marital property fairly and equitably during your divorce. If your spouse’s actions have reduced the value of your marital estate, this issue will need to be addressed during your divorce. In order to prove that asset dissipation has occurred, you will need strong evidence that demonstrates your spouse’s wasteful behavior. Some common types of evidence used in these cases include:
Bank statements: Reviewing bank transactions can help identify any unusual or excessive spending patterns by your spouse. Money that your spouse withdrew without informing you will need to be accounted for, and transfers to other parties will need to be explained.
Credit card statements: These records can reveal the types of purchases made by your spouse and identify any money that was spent for non-marital purposes. For example, hotel rooms paid for with a credit card may be evidence that your spouse spent this money to engage in an extramarital affair.
Tax returns: Analyzing the income reported to the IRS, the tax deductions that were claimed, and the refunds that were received may uncover hidden income or discrepancies that indicate attempts at hiding money.
Emails and text messages: Communications between you and your spouse might contain information about spending patterns or other behavior that is considered dissipation. Other types of messages may also be uncovered, such as emails or social media messages sent to an affair partner discussing items that were purchased or other money that has been spent.
Witness testimony: Statements from friends, family members, or financial professionals who can attest to your spouse’s wasteful behavior may play a significant role in proving that dissipation has occurred.
Addressing Hidden Assets
Some of the most common forms of asset dissipation involve hiding marital property, concealing money or other items, or misreporting the value of assets. If you are concerned that your spouse may be attempting to hide money or assets from you in order to unfairly influence the division of marital property, you should be on the lookout for ways that they may do so. You can watch for issues such as:
Sudden decrease in income: If your spouse’s income changes without any valid explanation, it could indicate they are diverting funds elsewhere. They may claim that they are earning less in hopes that they will be able to reduce the amount of spousal support or child support they will be required to pay, but they may actually be moving some of the money they earn into a hidden account or using other methods to conceal it from you.
Mysterious transactions: Keep an eye out for any unusual transactions, such as large cash withdrawals or transfers between accounts that you were previously unaware of. These may be attempts to transfer money to friends or family members temporarily, with the plan to receive this money back after your divorce has been finalized.
Hiding valuable items: Your spouse might try hiding valuable items such as artwork, jewelry, antiques, or cash to prevent them from being included in the division of property. You may want to look for hiding places around your home, as well as other locations, such as safe deposit boxes.
Overpaying debts: Sometimes, a spouse may intentionally overpay debts to create a false financial burden and reduce the overall value of marital assets. Your spouse may claim that they are paying money that they owe to a friend or family member, but they intend to receive this money back after completing the divorce.
Secret bank accounts or credit cards: Your spouse might open accounts under their name only, and they may then use these accounts to hide funds or make undisclosed purchases.
Hiding money in a business: If your spouse is a business owner, they may misreport the value of the business or its assets, resulting in an unequal division of marital assets. They may also use other methods to hide money, such as paying a salary to a nonexistent employee while keeping this money in a hidden account.
Legal Remedies for Asset Dissipation
Asset dissipation can have significant consequences for the division of marital property. When a spouse wastes assets intentionally, hides money or property to avoid dividing it, or uses marital funds to benefit themselves, these actions will affect the overall value of the marital estate. The court may take these actions into consideration when determining how property will be divided.
If you can prove that asset dissipation took place after you began your divorce or during the time when your marriage was ending, the court may decide to award you a larger share of marital property to make up for the amount dissipated by your spouse. Alternatively, your spouse may be ordered to reimburse the marital estate and use their separate assets to make up for the amount they had dissipated. Other penalties may also be imposed, such as a finding of contempt of court if your spouse willfully refused to disclose financial information or lied in court about their actions.
Contact Our Elmhurst Asset Dissipation Lawyers
If you suspect that your spouse has hidden or wasted assets prior to or during your divorce, [[title]] can make sure this issue will be addressed correctly during your case. Our experienced DuPage County complex divorce attorneys can use the appropriate discovery methods to uncover dissipation, and we will advocate for solutions that will protect your financial interests. Contact us today at [[phone]] to schedule a consultation and learn how we can help you complete the divorce process successfully.