Tag Archives: forensic accountant

Dealing With a Spouse Who Is Hiding Assets

hiding, Wheaton divorce attorneysWhen a marriage is clearly headed for divorce court, sometimes one or both spouses will resort to practices that are not strictly acceptable; some may even be unlawful. Hiding assets is one of the most common of these practices, but its commonality does not make it easier to spot. Some spouses are very successful at hiding assets with other people or in alternate accounts, but there are ways that you can discover such actions and obtain some manner of restitution.

Full Financial Disclosure Is Required

Illinois law demands both spouses provide a full accounting of all marital and non-marital property once divorce proceedings have begun. At the beginning, it can be easier for assets to be hidden, especially by the spouse that governs the household finances, but the discovery process, where both spouses must provide financial records and other documents, can make that much more difficult even if someone does not make a full disclosure. Forensic accountants can trace expenditures through transactions that can otherwise look innocent, and discovery is the time when it is easiest to pick up the proverbial trail.

If you do not have the ability to engage outside help, there are tricks more often used than others to hide assets, simply because they work. Some of them include “selling” or “willing” items to friends and family members seeming at random, purchasing items that are easily undervalued like artwork or vintage automobiles, changing passwords to financial accounts—sometimes even shared ones—and reporting lower amounts of income than are actually being received. All of these are, at the very least, ethical violations, as the financial disclosure each spouse must submit has the force of a statement under oath.

When He or She Gets Caught

If you are successful in catching your spouse in hiding assets, the court has multiple options in deciding how to handle such a matter. Generally, the outcome will depend on the specific nature of the alleged misuse. Illinois law does not permit any kind of punitive redistribution of assets; the relevant statute specifically says that assets will be divided equitably, “without regard to marital misconduct,” but sometimes a court will hold that the value of the hidden asset should be awarded to the spouse who was disadvantaged by its hiding. This is seen as an equitable remedy; if a person is deprived of tangible property, he or she may not be able to get that specific property back, but he or she can be awarded its fair market value.

In extreme cases, your spouse may be found in contempt of court, especially if a judge can determine that their conduct flouts or disrespects the court’s authority. This can lead to you being awarded attorney’s fees, or sometimes it will lead to a court ruling against the spouse in contempt with regard to the disposition of other assets. While the law does not permit you being awarded a greater share of the marital estate in response to a spouse hiding assets, there are numerous equitable remedies—those that make up for what you have lost as opposed to remedies that give you more than what you had—in such a situation.

Get Help Finding Hidden Assets

It can seem intimidating when you suspect that your spouse is hiding assets and you are uncertain how to find them. Having a good lawyer on your side can help you feel less alone. Our skilled DuPage County divorce attorneys can help you determine how best to approach what can be a time-consuming and exhausting process. Contact our office today to set up a free consultation.

 

Sources:

http://www.acfe.com/career-path-forensic-accountant.aspx

http://www.ilga.gov/legislation/ilcs/documents/075000050K503.htm

Valuing Assets in a DuPage County High Asset Divorce

forensic accountant, Wheaton divorce attorneyIt goes without saying that there is a lot at stake when a couple with a large number of assets gets divorced, and the sheer scope of the property involved can make these cases daunting. Many couples have assets spread across numerous types of accounts and investments across the country. Sometimes even international assets are involved. Add in the fact that in many cases one spouse attempts to hide or devalue assets to avoid giving up property in the divorce, and you have a recipe for a case that can drag on for years. However, many clients are now finding that high asset divorce cases can be simplified through forensic accounting.

What Is Forensic Accounting?

A forensic accountant is a financial professional who has investigative and auditing abilities that go far beyond that of an average accountant who may help prepare your income taxes. Similar to how a forensic scientist helps police put together what happened at a crime scene, a forensic accountant can help a divorce attorney reconstruct where assets came from, where they have been hidden, and how they have been devalued.

In addition, a forensic accountant can produce reports about his or her findings that can be introduced into evidence at hearings, and also offer expert testimony on what an investigation has uncovered. Many forensic accountants work closely with attorneys on high asset divorces and other cases, so they are often quite familiar with legal procedure.

Why a Forensic Accountant Is Valuable in High Asset Divorces

Assume one spouse has a sizable partnership active in several states, as well as a trust that holds property located across the Midwest. Figuring out the exact value of these assets would be difficult for a regular accountant, but a forensic accountant will go through years of transactional records to determine the exact value of the assets held by the partnership and trust.

In many cases, a spouse may purposely represent that these assets have a lower value to avoid paying higher taxes, but a forensic accountant can review records to find the true value of this property. And, of course, a forensic accountant can be invaluable in determining how exactly a former spouse has hidden assets from consideration in the divorce proceedings.

One other issue that regularly comes up in Illinois is the value of pension benefits. These benefits can be difficult to calculate exactly based on cost of living increases, inflation and life expectancy, but a forensic accountant can assist in producing a report that accurately reflects the value of these assets.

Contact an Experienced Attorney

Figuring out what you are entitled to is never easy in a divorce, and it only gets more complicated when a divorcing couple has a large number of different high value assets. An Illinois divorce attorney can ensure that these assets are properly valued in a divorce so that you get your fair share of marital property. Contact our dedicated and experienced DuPage County family law attorneys today for a consultation and to learn how we can help you.

Source:

http://www.forensicaccounting.com/three.htm

Uncovering Financial Infidelity in a Divorce

financial infidelity, Wheaton divorce attorneysDivorcing couples typically have a lot of contention over money. In many cases, this is the one issue that prevents couples from reaching an amicable divorce settlement and keeps divorce cases in court for years. Usually, there is a great deal of money, property, businesses, or other assets at stake. All too often, the thought of having to cash in these assets to split in a divorce is enough to make one spouse commit financial infidelity.

Financial infidelity is defined as one partner’s secretive act of spending money, having separate credit cards or accounts, or incurring debt without the other partner knowing. In divorce proceedings, it is common to employ an accountant to uncover financial infidelity. On the surface, it may be hard to uncover such behavior, but taking a closer look at certain transactions can shed light on what has been happening behind the scenes. Here are several way in which a spouse can hide assets:

  • Overpaying the IRS – a spouse could overpay income taxes and instruct the IRS to use the overpayment against future tax payments;
  • Accruing commissions – a spouse could instruct his employer to withhold paying out commissions until a later date;
  • Forgoing promotions and raises – a spouse could ask for a promotion or raise to go into effect after a divorce is finalized;
  • Making large purchases – a spouse could shield assets in a large purchase, like a piece of artwork or an antique. The spouse could also have this piece undervalued to shield more money;
  • Transferring funds – a spouse could transfer funds to a friend to pay a fictitious debt or into a pension or 401(k) plan to cloak assets as valid outlays of money;
  • Setting up secret accounts – a spouse could open up a separate account of which the other spouse is unaware. The spouse could even go as far as opening an account in another person’s name to shield assets; and
  • Protecting assets through owning a business – for spouses that own a business, a number of assets can be protected behind the corporate entity. There are also a number of things a spouse can do to reduce the value of the business so it would affect the distribution of assets during the divorce.

Finding a Paper Trail

In many cases, a forensic accountant is necessary to help uncover everything a spouse has tried to hide. A forensic accountant can collect information from bank statements, tax returns, and investment account statements, along with other personal information and a lifestyle analysis to determine if assets have been hidden and how they have been concealed.

In Illinois, if a spouse is found to be hiding assets, there are several ways they could be held accountable. These include: the offending spouse being held in contempt of court; the judge awarding the other party the percentage of the asset that would have gone the offending spouse; the offending spouse’s share being forfeited,; and the offending spouse being sanctioned.

As if a divorce is not already complicated enough, uncovering assets that have been hidden creates an additional layer of challenges with which to contend. If you are considering a divorce and believe your spouse has been hiding assets, you need an experienced and knowledgeable attorney to help you navigate the divorce process. Contact our experienced DuPage County divorce attorneys for a consultation.

 

Source:

https://www.dupageco.org/CourtClerk/3198/