Think Your Spouse is Lying About Their Income? Protect Yourself in Your Divorce

 Posted on January 21, 2025 in Divorce

One of the biggest issues that will be determined in a divorce is the division of assets between spouses. For this reason, having accurate and truthful information about your spouse’s income and the rest of their assets is vital to ensuring that you receive a fair share according to the terms of the law.

If your spouse is hiding assets, it can impact what you receive in a divorce and add to the already significant stress of divorce. An experienced Wisconsin divorce law attorney can work on your behalf to ensure that your spouse does not get away with hiding any income or assets in the divorce.

What Does Wisconsin Law Say About Hiding Assets in Divorce?     

Wisconsin is a community property state, meaning that any income earned by one spouse during marriage is owned by both spouses. During a divorce, a court will aim to divide the marital assets, income, and debt of the spouses equally. Wisconsin requires that spouses fully disclose their assets, and hiding assets in divorce is against the law.  

How Can Your Spouse Hide Income or Assets During a Divorce?

If a spouse is motivated to hide their income or assets in a divorce, they can attempt to do so in a few ways: 

Underreporting Income

If your spouse has a side business or runs a cash business, they can underreport that income or not report it at all. Another way to underreport income is to deposit money in hidden accounts.

Undervaluing Assets

By undervaluing assets such as art, jewelry, collections, or tools, a spouse can hide the true value of certain marital property in an attempt to give you less.

Paying With Cash

This method involves paying off joint debt such as mortgages or cars with cash or savings accounts to deliberately use up liquid funds, which are easier to split than physical assets.

Helping Friends Pay "Debts"

A spouse may say that they are "paying off" the debt of a friend or family member when in reality they are fraudulently transferring money and have agreed that the friend will return the money later.

Delaying Compensation

Another "creative" way that your spouse may attempt to hide assets is by delaying compensation. To do this, they would arrange to be paid raises, bonuses, or stock options after the divorce is finalized.

Signs Your Spouse Is Hiding Assets or Underreporting Income 

You Can’t Get Information About Your Financial Situation

Although spouses have different ways of making financial decisions during their marriage, if your spouse suddenly gets angry or secretive when you want to discuss finances, re-routs mail, or deletes computer files or financial software, that may be a red flag that they are hiding financial information. Likewise, if they keep their financial situation at work hidden, they may also be hiding something.

Claims of Financial Hardship

If your spouse suddenly claims they do not have money or have lost their income, but this change is not reflected in their lifestyle, this could be a sign that they are hiding income.

Unusual Financial Transactions

One of the ways that spouses hide finances is by transferring assets. Watch out for loans to friends, large purchases of hard-to-value items like art, payment of debts you did not know existed, or large withdrawals from bank accounts.

Business Manipulation

If your spouse owns an interest in a business they may under-report its income or inflate its expenses. Likewise, they could claim nonexistent debts or delay paying vendors in an attempt to make it seem less successful. They may also manipulate the numbers to get a lower valuation for their business.

What You Can Do If You Think Your Spouse Is Hiding Income

If you believe your spouse is hiding income or assets, there are things you can do as well as legal steps that a qualified attorney can take, including: 

Take Inventory of Your Assets and Debts

The first thing you should do when you prepare for divorce is take inventory of your assets. Arm yourself with as much information as you possibly can about your marital assets, especially if you did not know much about your finances during the marriage.

Hire a Forensic Accountant

Think of forensic accountants as private detectives for hidden assets. A forensic accountant’s job is to find hidden income and assets and determine how much of an asset belongs to each spouse. They have specialized knowledge they will use to analyze financial records looking for inconsistencies, unusual transactions, and anything else that may hint at hidden assets. They may conduct a valuation of your spouse’s business to uncover its true value, or even analyze your spouse’s lifestyle compared to their claims of financial hardship.

Look for the Assets

There are places that you can look for hidden assets, including: 

• Tax returns (1040 income form, for example)

• Public records

• Bank accounts

• Expensive purchases

Conduct Legal Discovery

Every lawsuit has a discovery process, which is the formal way that parties obtain evidence from the other side. The divorce proceeding is no different in this respect. Your attorney will obtain information about your spouse’s finances through formal legal requests or subpoenas during discovery to determine your spouse’s real income.

What Are the Consequences Of Hiding Assets in a Divorce?

There are very real legal consequences to your spouse hiding assets in Wisconsin. A court may impose sanctions such as awarding you attorneys’ fees or a larger portion of the marital property. Your spouse could be placed in contempt of court or face perjury charges if he lied under oath.

How Does An Attorney Help If Your Spouse Is Hiding Income?

An experienced divorce attorney understands the ways that spouses attempt to hide assets or income, the ways to find it, and the ways such a spouse can be stopped. Your divorce attorney will use their experience to guide the process of searching for hidden assets both in and out of court, whether that means working with a trusted forensic accountant, asking for a temporary order, or conducting aggressive discovery.

Contact a Milwaukee, Wisconsin Divorce Attorney 

Divorce is one of the most stressful life events that you can go through. Financial deception can make it even harder. That is why the attorneys at Gimbel, Reilly, Guerin & Brown, LLP are ready to aggressively protect your interests in your divorce proceeding. Contact our experienced Milwaukee, WI divorce attorneys at 414-271-1440 for a consultation, and to safeguard your financial rights.