Hidden Assets in Divorce: Asset Transfers to Family Members or Others to Conceal Assets

 Posted on May 17, 2016 in Family Law

Hidden assets, undisclosed income, and phony debts to business associates, parents, or relatives are commonplace to those divorcing or thinking about divorce.

Spouses who realize they will soon be going through an Illinois divorce frequently think of clever ways to lower the marital estate in order to give their spouse less assets or less money in their divorce. Lies, false accusations, and the transfer of assets which these spouses believe will never be discovered during a divorce case occur all too frequently. In fact, your husband or wife may try to intimidate you into believing that he or she can successfully lie about his or her transfers of assets and simply get away with it. Not true.

An experienced divorce lawyer, like a magician, knows the truth behind the trick. As clever and brilliant as you may think your spouse may be, the odds are that spouses in Illinois divorces have already tried a similar lie, trick or scheme.

In re Marriage of Adler, 271 Ill. App. 3d 469; 648 N.E.2d 953, we discovered the scheme our client's husband tried to get away with. Brigitta Adler's husband, Horst Adler, filed a divorce against his wife. On the eve of trial, Martoccio & Martoccio, attorneys for Brigitta, discovered that her husband, Horst Adler, contrary to his discovery deposition, had dissipated $300,000 in marital assets and lied about owning vacant land in Lyle, Illinois, and had transferred 50 percent of his interest in that land to his friends, Joseph Giampa and his son, to defraud his wife, our client.

The Appellate Court of Illinois noted:

This action began on November 8, 1988, with the filing of a petition for dissolution of marriage. It proceeded rather unremarkably until June 1992 when the Respondent, Brigitta Adler, filed a motion seeking a continuance of a scheduled trial date alleging that Horst Adler: (1) had dissipated in excess of $300,000 in marital assets; and (2) contrary to his discovery deposition testimony, owned an interest in the unimproved property commonly known as 511 Chicago Avenue in Lisle, Illinois (Lisle property).

Acting as Brigitta’s trial attorneys, we filed and succeeded with a motion to join as defendants, Joseph Giampa and son. At trial, the trial judge denied their claims that they owed money to Horst Adler. We succeeded in increasing the marital estate by $300,000 and avoided Horst Adler’s scheme to defraud our client of her fair share of the marital estate.

What is the take away from the Adler case in similar cases?

1. Make sure that your spouse’s deposition is taken during your divorce case if you have any concern with hidden assets or transfers of monies. Without a deposition, it may well be impossible to contest your spouse’s claims that those hidden assets or transfers were legitimate.

2. Make sure that your divorce lawyers do their “due diligence” in obtaining all of the necessary documents and records to make sure that there are not any doubts about assets and that no assets were hidden from you.

3. When you suspect your spouse is faking debts, as in the other case, make sure that your divorce lawyer joins as parties to your divorce—those individuals who claimed to be creditors of your spouse but are just holders of phony debts created to cause you to lose your fair share of the marital estate.

4. Do not give up! It is not too late even on the eve of trial, as we did in the Adler case, to bring to the trial judge’s attention to the wrongdoing by your spouse. Do not let fear, intimidation by your spouse, or the system persuade you not to pursue your legitimate rights. Frequently, all of the people in your life—your friends, family, and even your lawyer—tell you that it is a waste of time and money. Just ask the Brigitta Adlers of the world if it is a waste of time and money.

Remember that there is no system of divorce law that will protect you. You only have your own perseverance, intelligence, and the skill of your lawyer to help you get your fair share the marital estate and get a fair shake in court. Everyone would like to settle a case—you, your spouse, maybe even your divorce lawyer. However, if you know it is wrong, whatever is being offered, stand up for yourself. You are entitled to the respect that anyone deserves after they have married and trusted their spouse.

In one recent case, our lawyers at Martoccio & Martoccio found undisclosed income from an ex-husband of over $480,000, and our client received child support based upon that additional income. In another case, our attorneys successfully uncovered undisclosed stock options concealed by the husband from the wife, which then resulted in our client receiving over $450,000.

Remember: truth is hard to find in divorce cases. Our skilled Hinsdale divorce attorneys at Martoccio & Martoccio know where to look and how to find the truth for you. Please call us at 630-920-8855 so we can show how to protect yourself from hidden asset schemes.