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Posted on in Divorce

hiding assets, Kane County family law attorneyDivorce is not only the end of a romantic relationship, but also that of a financial relationship. Courts use financial information from both spouses to make decisions about spousal maintenance, child support, property division, and more. Although everyone handles divorce differently, there are some mistakes that should be avoided at all costs.

Hiding assets or attempting to misrepresent your financial circumstances is one of these mistakes. Artificially deflating your income, failing to report a piece of real estate, transferring money between accounts, not reporting a source of income, or otherwise distorting your financial status can result in penalties, money sanctions, and a more problematic divorce. In order for a divorce to go as smoothly as possible and to avoid negative consequences, it is critical that both spouses are honest regarding their finances.

Hiding assets during a divorce may not be as obvious to spot as one may suspect. There are many tactics that spouses use to misrepresent their financial circumstances. A spouse who is attempting to fake their financial status may:

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Posted on in Hidden Assets

hiding assets, St. Charles divorce lawyersDuring a divorce, it is a legal requirement that each spouse disclose information about his or her financial situation. This includes detailed information about property, income, expenses and debt. However, some people are dishonest in their financial reporting. Sometimes a spouse will attempt to hide assets from his or her partner, and this can happen for several reasons. Often, a spouse does this to avoid having to share those assets with the other party in the divorce. Other times, a spouse may not want to report all of his or her income so that he or she will have to pay less in spousal support (alimony) or child support. Hiding assets during a divorce is against the law and can result in serious penalties.

Some common ways that spouses hide assets include:

  • Hiding, or undervaluing marital property;
  • Overstating debts;
  • Underreporting income; and
  • Reporting higher than actual expenses.

According to the National Endowment for Financial Education, approximately a third of US adults who combined assets with a spouse admit to being deceptive about money. The penalties for doing so can be strict. For example, in one famous incident, a woman won $1.3 million in a lottery before filing for divorce. She did not report this income and attempted to hide it. When the judge preceding over the divorce case found out, he awarded the entire $1.3 million to the husband.

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Posted on in Divorce

credit, Kane County divorce attorneyIt is not uncommon to experience credit issues or other financial problems in a divorce. Many people, however, are ambushed by the true scope of such issues and, as a result, experience serious difficulties. If you are just beginning to go through a divorce, or if you have been experiencing financial problems even before your divorce begins, you may need to take steps to ensure that things do not get worse.

Take Steps Before You File

If at all possible, it is generally a good idea to do what you can to ensure your finances remain stable even before beginning divorce proceedings. The first step that should be taken, if you and your spouse remain on good enough terms, is to work together collectively to minimize or eliminate as many marital debts as possible, as well as to close or freeze joint accounts. Illinois law holds that debts acquired by either spouse “subsequent to the marriage” are classified as marital property, meaning that when your assets are divided, your debts will be as well. This can sometimes lead to you being on the proverbial hook to pay off a debt you did not incur.

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Posted on in Divorce

costs, Kane County divorce lawyersThe process of divorce can be very expensive, often requiring a significant investment of both time and money. In fact, one of the first questions most people considering a divorce tend to ask pertains to what the financial cost will be. There is no way to determine exactly the cost involved in completing the divorce as it can vary greatly depending upon the circumstances of your marriage and your ability to work with your soon-to-be ex-spouse. Your costs will also be affected by your expectations for the divorce, and whether your desired outcome is reasonable or realistic.

Plan Ahead

One of the important aspects of a cost-effective divorce is comprehensive preparation. Long before you are ready to file your petition for the dissolution of marriage, you can begin planning. Make a list of your marital and non-marital assets, and start thinking about your priorities. Determine which assets you would like to keep, which assets your spouse should get, and which assets really do not matter either way. If you and your spouse have agreed that divorce is your only option, you may be able to cooperate with surprising effectiveness at this stage.

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planning, St. Charles divorce lawyerWhile there are certainly many elements of a divorce that can create controversy, those related to a couple’s finances are often among the most challenging. This may be especially true when one or both spouses have a high net worth and have accumulated significant wealth. Proper planning, however, is crucial for divorcing couples in any tax bracket, and if your divorce is on the horizon, there are a few things you can do to help protect your assets and investments.

Gather Pertinent Information

Just as preparations for your marriage began long before you applied for a marriage license, you should not wait until you file for divorce to begin planning for the process. Even if divorce is merely a possibility, you can start preparing by getting all of your relevant financial information together. Go back about five years and gather account statements, transaction records, tax returns, credit card invoices, investment documents, and anything else you can think of that will provide a clear picture of your financial situation. If you are not sure if a particular item should be included, include it anyway. Be sure to keep a copy of everything and be ready to present these records to your attorney for disclosure to your spouse's counsel and perhaps even the court.

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