How to Find Hidden Assets & Offshore Accounts During a Divorce

No. It is almost always advisable to continue the discovery process, especially when a divorce involves significant assets. Legal discovery can be a challenging and time-consuming process; however, if a spouse fails to disclose assets, a court will likely ask about the formal discovery answers in future proceedings. Did your ex-spouse lie on these answers? If so, you may have good cause to reopen the previous judgment and reallocate the asset.

An individual who fails to disclose assets can be ordered to pay attorney fees and other expenses expended to find hidden property and other assets. Further, Illinois property division laws direct the Court to equitably divide the marital estate. However, Equitable Distribution does not necessarily imply equal. Thus, if a spouse is caught concealing assets, a court may require them to pay more than half of the value to the other spouse. For example, if $100,000 in marital assets were hidden, a judge may order the spouse who concealed the assets to pay $70,000 to the other spouse.

Despite the potential penalties, many individuals still choose to take the risk and go to great lengths to conceal such assets, especially when significant value is involved. Thus, it can be imperative to the success of finding such valuables to reach out to an Illinois divorce lawyer who is experienced in taking efficient and effective steps to find hidden assets and offshore bank accounts.

Often the first clue about whether assets may be hidden is if a shared bank account does not seem to accurately reflect wages received as an employee or income earned from a business.  For instance, if a spouse is an employee, income deposited into the account may be less that what the spouse is earning (based upon income tax filings).

If the spouse owns a business, it will be important to check the business banking account to determine the amounts that have been paid to the spouse from the business, and to see if this amount correlates with personal banking deposits.  If the personal banking deposits are significantly less than the business owner payments, this may indicate that amounts from the business are being deposited into another account.

The methods for hiding assets can be complex.  As an example, a business owner could create a fake vendor, and then “pocket” the payments supposedly paid to this vendor.  Or, the vendor may be real, but the expenses on the books to the vendor may be overstated, allowing an owner to pocket the overpayment.  Other similar fraudulent tactics can also be implemented.

Businesses where customers typically pay in cash and jobs in which a person may receive substantial tips may also be problematic, as in these cases it is much harder to account for the cash received.

There are several ways to discover hidden assets in the divorce process, including:

• Reviewing bank accounts to identify withdrawals and missing deposits;
• Subpoena a spouse’s employer to determine employment income and contributions to company retirement accounts;
• Review personal tax returns;
• Subpoenas financial records and financial account applications (including for loans); and
• Hire a forensic accountant and investigative experts who can assist during the discovery process. If there is a good reason to suspect that assets may be hidden, we recommend this approach, as a professional forensic accountant will know where to look in search of hidden assets.

Yes. Assets can easily be manipulated and hidden in a business. For example, companies that were previously profitable suddenly begin losing revenue during a divorce.  There may be two sets of books for a company – one that shows expenses as being much higher than is the true case, making the company look less profitable.  Alternatively, personal expenses may be written off as business expenses, also lowering the revenue reported on the books.