Despite the rise in emerging electronic payment methods like Apple Pay, Venmo and Zelle, it may sound surprising that cash is still the most common form of payment. While cash has its advantages, it can complicate divorce cases, especially for a spouse divorcing a partner who is paid in cash at work or primarily handles transactions in cash.
Clients who find themselves in this situation often worry about proving, without documentation, how much property there is to divide; how much their spouse earns to determine spousal support (maintenance) and child support; and/or how to prove the existence of certain expenses without any documentation.
While a “cash lifestyle” may seem ominous, all is not lost. A knowledgeable and experienced attorney can establish cash-based spending patterns and uncover alternative income sources that a spouse may be attempting to conceal.
How A Cash Lifestyle Can Affect Support
In Illinois, if a couple’s combined income is within the threshold amount set forth in the Illinois Marriage and Dissolution Act, then support (child support and maintenance) is determined pursuant to a formula. If a couple’s combined income is above the statutory threshold amount, then the court may consider the lifestyle established during the marriage in setting support.
So, how do you prove the amount of a party’s income for purposes of support in the absence of documentation when cash compensation is involved?
Attorneys can look for discrepancies between the amount of income a spouse claims to have and their real-world expenses. When the money coming in doesn’t match the money going out for the lifestyle, it may signal an undisclosed income source that the court can consider for support. Attorneys can also look for deposits from known income sources, and if such deposits don’t exist, it signals that the party may have been paid in another way (cash, bartering, etc.)
Imagine this scenario: your ex purchases a car or boat, yet there’s no credit card charge, loan document or bank statement. Your attorney could ask where the funds came from. If your ex denies the purchase or can’t credibly explain it, the next step is to trace alternative income sources. That could include subpoenaing the dealership or seller, reviewing cashier’s checks, payment apps or business accounts and obtaining any related records. If your ex can’t substantiate the source of the funds, the court can impute additional income to your ex, resulting in more support for you.
How A Cash Lifestyle Can Affect Property Division
The use of cash can also complicate the division of assets in a divorce—specifically, the ability to ascertain the nature and extent of the marital estate and property division.
First, as it relates to quantifying the amount of property, attorneys would employ the same strategy as when identifying cash income, as set forth above.
Second, as it relates to property division, cash spending can affect property division when dissipation is involved. Dissipation occurs when one spouse uses marital funds for a purpose unrelated to the marriage (i.e., an affair, excessive dining out, gambling, etc.) when the marriage is breaking down. If dissipation is proven, the amount a spouse dissipated is “added back” to the marital estate prior to the assets being divided, thereby ensuring that the other spouse is fairly compensated.
Bank records can help identify patterns of cash withdrawals and/or credit card statements can show the absence of payment for certain lifestyle expenses — meaning those expenses are paid for by alternative means like cash. Attorneys can then request additional subpoenas to get more records as needed and depose third parties to verify a spouse’s use of cash.
Consider this example: if your ex had the car detailed every month but always paid in cash, the absence of the car detailing expenses in a spouse’s bank and credit card records, when it is a proven lifestyle expense, indicates that the service was paid for by other means. An attorney could then look for corresponding cash withdrawals in your spouse’s bank account that align with the typical timing and cost of that service. If needed, a specific employee of the car detailing business can be subpoenaed for records and/or to testify regarding the spouse’s use and frequency of the detailing service and form of payment.
Addressing Cash-Related Issues in a Divorce Case Requires Expertise
Spouses may use cash for a variety of reasons, whether it be to hide expenses and reduce the support owed in a divorce or to conceal behaviors like infidelity. Whatever the motive, attorneys can obtain a spouse’s financial records through regular discovery channels or a subpoena.
If your spouse is paid in cash or primarily handles transactions in cash, it’s essential to work with an attorney who has both the legal experience and investigative mindset to uncover key financial details. While it certainly becomes a more difficult case to prove, know that it is possible.