Q: How are hidden assets discovered?
A: The first procedure is self-help on the home front. Any papers with dollar signs and numbers are potential clues. The storage place for records of assets is often in the computer, or places to which the other spouse does not have easy access. Other hiding places include the locked trunk of the car and a locked briefcase. There are opportunities to gain access to keys.
The second means of learning about attempts to hide assets is in the court proceedings, through what is known as “discovery”. In discovery your spouse is required to answer written questions (interrogatories) regarding the location, transfer etc. of assets, and he is required to produce documents relating to assets. Your reliance is not placed solely on your spouse. For example you may ask your spouse for bank records, and receive none, but if you suspect your spouse has been doing business at a certain financial institution, you may subpoena the records of that institution.
Q: How about gaining access to data in the computer?
A: Even materials that are “deleted” from the computer can be brought up by a forensic computer consultant. The kid next door may be your “computer consultant”, but you need the sophistication of a computer consultant who is trained in discovering data for use in court, a forensic computer consultant.
Q: What is a “paper trail”?
A: For the ownership of most valuable assets, such as real estate, stocks and bonds, accounts of money, motor vehicles etc. there is a registration, or paper record of ownership and transfer of ownership. If A transfers a valuable asset to B, there will usually be a paper trail. Most divorcing parties who are seeking to hide assets do not have the sophistication required to hide transactions.
Q: My spouse owns a business. It is a corporation. Is there an opportunity to hide assets within the business?
A: Yes, you bet. By law the corporation is a distinct legal entity, that is, like another person. To complicate matters there can be a primary corporation and that primary corporation can own other subcorporations. It sometimes takes a lawyer with sophistication about corporate structures, and a forensic accountant to find the paper trail within corporations.
Q: Is there an opportunity to hide assets, or income, within a small business which is not incorporated?
A: Absolutely. Cash is the easiest to hide and often not traceable. There are, however, creative ways of investigating. For example, a spouse who is a carpenter-contractor will usually buy most of his building materials from one source, for example, a lumber yard. The records of the lumber yard in regard to this spouse’s purchases can be subpoenaed. The records will show the site to where the materials were delivered. The homeowner can then be subpoenaed to discover how much was paid to the contractor. This type of investigation can also be applied to other small businesses.
For more information visit Gitlin, Busche & Stetler, Woodstock, Illinois lawyers website.
H. Joseph Gitlin covers the practice of family law in Illinois. Mr. Gitlin is the author of Gitlin on Divorce Reports, which summarize current Illinois opinions. Click here for Gitlin on Divorce Reports information or contact the office at (815) 338-0021. Mr. Gitlin's book, Gitlin on Divorce, A Guide to Illinois Matrimonial Law is a necessary tool for lawyers and legal assistants involved in family law and for judges hearing matrimonial cases.
