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The division and distribution of marital property is often one of the most contentious areas of divorce, especially in a high net worth divorce. Spouses frequently disagree about the value of assets and to whom they belong, and sometimes will even attempt to hide income or other assets. If you know your spouse made a certain amount of income, but this amount seems to have suddenly dropped now that you have filed for divorce, they may be trying to hide their true income in an attempt to pay lower amounts of spousal support or child support.
In this article, we will discuss ways that people often try to hide their income, as well as what you can do to ensure all income is fairly accounted for. Keep in mind that this is not legal advice and that your best strategy is to contact a qualified divorce attorney.
People attempt to hide marital income in many ways. Some of these may seem silly and ineffective, but some are quite sophisticated and require financial tracking or accounting experts to find. Methods of hiding income include:
Regardless of the strategy, hiding income in a divorce is illegal and unethical. Unfortunately, many people do it in order to maximize their potential net worth after a divorce settlement.
Self-employed spouses are able to hide income more easily than most, especially if they deal in cash. If you know that your spouse regularly does not report income to the IRs, make sure you file individual rather than joint tax returns. Filing a joint tax return and signing when you know your spouse’s income to be fraudulently reported may be seen by a judge as you admitting that the income was correct. When spouses are totally paid in cash, the only way to prove their real income is to track how much that spouse regularly spends. This can be very difficult, especially after the fact.
Other methods self-employed spouses may use to hide income include inflating business expenses to show less income and changing personal expenses to business expenses or debt. Business valuation specialists and forensic accountants can help you track and assess whether your spouse’s business behavior is legitimate or an attempt to hide income.
Finding hidden income can be a complex endeavor, but an experienced Hinsdale divorce attorney may be able to help. At Law Office of Martoccio & Martoccio, we consult with financial specialists when necessary to ensure that we locate and include the true value of your spouse’s income and assets. We will advocate passionately on your behalf to ensure that you get the portion of your divorce settlement to which you are entitled. To schedule an initial consultation, call us today at 630-920-8855.