How to Find Out if Your Spouse Is Hiding Assets in a Divorce Case

Divorce is already a stressful process and it becomes even more complicated when there are suspicions that one spouse is hiding assets. Unfortunately, it’s not uncommon for individuals to try to shield money or property to gain an advantage in divorce proceedings. If you believe your spouse may be hiding assets, there are specific strategies you can use to uncover the truth.

The first step in uncovering hidden assets is understanding the common ways people conceal them. Here are the top 5 red flags to watch for:

1. Sudden changes in spending habits: If your spouse is suddenly more frugal or overspending, they might be manipulating accounts to hide or divert money.  Taking cash back at stores, hitting up ATMs, purchasing and returning items for cash are many ways to alter spending and tracking of funds.
2. Unreported income: If your spouse works in a cash-heavy job (like a restaurant server, freelancer, stylist, or contractor), they may underreport income or stash it away.
3. Transferring assets to family or friends: Some spouses may “lend” or gift money to trusted individuals, intending to reclaim it after the divorce.
4. Creating “fake” debt: This involves claiming to owe money to a friend or family member or creating new personal or house projects, when, in reality, they are just using this as a way to hide funds.
5. Underreporting the value of business interests: Business owners may manipulate their financial records or downplay the value of their company.

The second step is to review financial statements and digital footprints thoroughly; this includes bank statements, credit card statements, tax returns, retirement and investment accounts, and credit reports for unusual activity or spending.  You can also review social media, online banking, joint email communications, and cryptocurrency accounts.  If it becomes necessary, your family lawyer may recommend hiring a forensic accountant who specializes in uncovering hidden assets by analyzing financial records and identifying irregularities. They are trained to look for complex ownership structures, unusual transactions, misleading accounting practices, and hidden offshore accounts. Hiring a forensic accountant can be invaluable, especially in cases where the spouse is a business owner or has a complex financial situation that can really impact the allocation of the marital estate.

Third, your family law attorneys have many methods to obtain information and documentation through the court process, including:

• Interrogatories: Written questions that must be answered truthfully under oath. These questions can cover income, assets, debts, and any transfers.
• Depositions: Your attorney can question your spouse in person, under oath, about their finances.
• Request for production of documents: This is a formal legal request for specific financial records, such as tax returns, bank statements, and investment account summaries.
• Subpoenas: If you suspect your spouse has hidden assets with a third party, your lawyer can issue subpoenas to banks, employers, or associates for documents related to their finances.

Your family law attorneys even have the power to file pleadings with the court requesting court intervention. A judge may issue court orders to freeze accounts, require the sale of certain assets, or appoint an expert to investigate further.

Failing to disclose assets during divorce proceedings is not only unethical—it’s illegal. Courts take asset concealment very seriously and can impose penalties.

Always consult with an experienced divorce attorney to guide you through the process and make sure you uncover any hidden assets your spouse may be trying to conceal.  Reach out to Jennifer Ward of Ward Family Law for a consultation today – jward@wardfamilylawchicago.com or 312-803-5838