What If My Ex Is Hiding Income?

December 16, 2022 O'Connor Family Law Child Support

The income of each person in a divorce proceeding is important, and if you are dealing with alimony or child support payments, income details continue to be important even after the divorce is finalized. Because income is used to determine how assets are divided and who makes what payments to the other person, some people are tempted to hide income to try to create a better outcome for themselves in a divorce.

Hiding assets during your divorce is always a bad idea. You can be held in contempt of court, even charged with perjury, and upon the asset being discovered, it can be given in its entirety to your spouse due to your deceptiveness. However, these risks do not always stop people from making an attempt to hide income, so it’s important to understand what to do if you believe your spouse is hiding income to keep from paying you child support or alimony.

Find out more about what you can do if your ex is hiding income below, and learn how a child support attorney or alimony attorney can help.

WHY WOULD SOMEONE HIDE INCOME DURING OR AFTER A DIVORCE?

The reason your ex might try to hide income during or after a divorce is to try to get out of the case paying as little as possible.

For example, child support guidelines used by the courts in Massachusetts allocate support payments in part according to the income of each parent. That means, the less income the payor spouse reports on their financial statement, the less they’ll have to pay in child support. Especially where, in a 50/50 parenting schedule, where the child support guideline calculation also heavily depends on what both parents earn, even the parent who would be receiving child support has an incentive to hide income.

Another reason someone may hide assets in a divorce is because they think doing so would save them from having to share any portion of that asset in the final division. Even if the divorce has been finalized though, if one spouse hid assets, the other has a right to go back to court and seek their right to that asset.

Even after a divorce is finalized, someone may continue to attempt to hide income increases so that their ex doesn’t file for a support modification. For example, your ex might get a promotion with a 20% increase in income. That could lead to a substantial increase in support payments in some cases, so he or she might try to hide that promotion from you so you don’t realize you can file for a modification. If there is nothing in your prior Judgment that requires that disclosure though, there is no obligation to tell you, yet they would need to disclose it if you filed the modification.

HOW DO YOU KNOW SOMEONE IS HIDING INCOME?

Understanding whether your ex may be hiding income from you requires observation and, sometimes, a little forensic accounting.

If you’re going through a divorce currently, pay attention to the paper trail. Look at shared bank statements and credit cards to understand your spouse’s spending habits. Check for shared checking, savings, and investment accounts to understand what types of deposits are being made and where the money is coming from and, even more importantly, where it is going. This is especially important if you’re considering or going through a divorce and your spouse was the one who tended to handle finances in your marriage. Educating yourself about the situation now can help reduce the likelihood that your ex can hide income from you during the divorce.

If you’re already divorced and wonder if your ex has had a substantial increase in income, pay attention to his or her lifestyle and spending habits where possible. Are they buying a lot of luxury items or have they purchased a new home or car that doesn’t seem feasible based on their reported income? Has your ex suddenly reported a substantial decrease in income, but you see that they are still living a lifestyle based on their previous income? These can be signs that he or she is hiding income from you. Check their social media for pictures of them going on frequent vacations or doing things that likely would not be practical if they only had the income coming in that they had reported previously.

PROVING YOUR EX IS HIDING INCOME

Having a suspicion that your ex is hiding income isn’t enough to do anything legally. To demand more alimony or child support during your divorce or file for a modification in payments later, you must be able to prove that your ex is hiding income, and sometimes, this can be very difficult.

Working with a family law attorney can help you do this. A divorce lawyer can work on your behalf through legal discovery processes to find out more about your ex’s financial situation and income. Some actions an attorney might take include subpoenaing payroll records, bank statements, and other financial account information that might document your ex’s actual income. They can also subpoena your ex to testify about his or her income in a deposition.

In many cases, these types of actions may be enough to bring the hidden income to light. Getting a promotion and raise and not being forthcoming about it is one thing; actively trying to hide the information when responding to legal discovery or subpoenas is another. Many people are not willing to go this far with it.

However, if your ex has hidden their income well and is not forthcoming about it even once a lawyer gets involved, your attorney can leverage other resources. They may bring in experts, such as forensic accountants, who can look at the information gained during discovery and find hidden income that wasn’t obvious to others so that they can explain the money trail to the court. Your attorney could also hire a private investigator to find out more about your ex’s lifestyle or spending habits, which can lead to information about income.

Whether you’re considering filing for divorce or you believe your ex owes you more in child support than he or she is paying, an experienced family law attorney can help. Contact O’Connor Family Law today to find out more about how we can help. Our team works with you to understand your case, educate you about your options, and implement a plan to support positive outcomes for you and your children.