Should I Trust My Spouse to Disclose Assets in Our Divorce?

 Posted on April 02, 2015 in Family Law

In my Illinois divorce should I use formal discovery or should I rely upon my Spouse's written and oral disclosure of his assets?

What Is Formal Discovery in an Illinois Divorce? Formal discovery is done in many Illinois divorces. Illinois divorce law provides for formal discovery in many ways. You are entitled to obtain documents and records from your husband or wife, to have your spouse answer written questions known as interrogatories or have your spouse attend an oral deposition where your attorney can cross examine your spouse outside of court before trial and ask far-reaching questions about assets such as businesses, real estate, pensions and other retirement accounts or your husband or wife's dissipation of assets. In addition, Illinois divorce law allows people outside of your divorce, that is "third parties" to be required to provide documents, give testimony or other types of evidence.

Third party outsiders to your divorce can be required to testify at oral depositions conducted by your attorney. A wide range of questions may be asked of such third parties to determine your husband's or wife's assets or income among many other things. Expert witnesses such as accountants or business valuators may be hired by you to have your husband or wife's business, real estate, retirement accounts or pensions  evaluated.

The asset valued and the marital portion divided in your divorce. All of these things are "Formal Discovery" which are permitted and even encouraged by Illinois Divorce Courts since the object is to obtain "full disclosure" of all assets, incomes and debts as well as all kinds of other information before you settle your divorce case or begin your divorce trial. The object of the divorce rules is to prevent surprise or concealment of assets, monies and even information from you as a spouse going through divorce.

Informal Discovery

You may be encouraged by your lawyer or by the cost of doing formal discovery to simply exchange lists of the assets, debts and incomes with your spouse. Even if you are using informal discovery, you should be wary that your spouse may misrepresent income, assets and other important information. For example, it is our practice at Martoccio & Martoccio to generally subpoena employment records of the other spouse in order to verify salaries, and other income, such as bonuses, expense accounts, as well as pension and retirement benefits, not because we believe the opposing spouse does not tell the truth, although many do not, but because some spouses are simply unaware of their actual employment benefits. The more complex the case or the higher income or assets levels of the parties the more likely that the discovery will be more expensive.

This is not because we believe in making a case more complex but because the likelihood missing income or assets is greater with a high income or high net worth couple. Most importantly, "Formal discovery" should be conducted to some extent if possible where businesses are involved or one spouse is unsure of the other spouses assets or incomes. The reason for this, the very important reason for this is that in an Illinois divorce you are bound by not only by what your spouse told you about assets or gave you by way of documents or written statements but what you could have obtained through formal discovery.

In re Marriage of Lyman

A recent case in point, In re Marriage of Lyman (February 2, 2015), makes this very clear. After their judgment of dissolution was entered which included a written Marital Settlement Agreement, the ex-wife about a year later filed petitions claiming her husband had defrauded her and breached their Marital Settlement Agreement. The ex wife stated that she had discovered recently that her ex husband had concealed three assets worth nearly $ 2,000,000.

The Appellate Court ruled in favor of the ex husband and found that Res judicata applies to judgments of dissolution of marriage. That is, the judgment of dissolution of marriage bars later claims as to assets that were disclosed  but also includes assets which could have  been discovered, such as the now ex wife's claim that she did not receive her fair share of the final distribution. The ex Wife failed to exercise due diligence when she decided to accept the ex husband's representations in his written and oral disclosures of his finances over her opportunity to engage in formal discovery.

If you are considering divorce and need the guidance of an experience divorce attorney, contact Martoccio & Martoccio at 630-920-8855. Our office is located at 15 North Lincoln Street in Hinsdale, Illinois.