Cash money has a strange effect on people. Cash seems more real because you can touch and see the money. Cash is not just digital numbers on a spreadsheet somewhere. Cash can be instantly transferred or received. If no one keeps a record (and no one ever does), the parties to a cash transaction are the only parties that know of that cash’s existence.
Because of cash’s inscrutable qualities, people expecting to be divorced immediately start accumulating cash. Whether the divorcing party is withdrawing cash from an ATM or accepting work for cash, the cash still can be traced…if you are diligent.
Cash money is an asset and cash money is income. Assets and income are the two major inputs in the Illinois divorce process.
Cash As Marital Property In An Illinois Divorce.
An Illinois divorce court “shall divide the marital property without regard to marital misconduct in just proportions considering all relevant factors, including:…whether the contribution is after the commencement of a proceeding for dissolution of marriage or declaration of invalidity of marriage” 750 ILCS 5/503(d)(1)
‘[M]arital property’ means all property, including debts and other obligations, acquired by either spouse subsequent to the marriage” 750 ILCS 5/503(a)
Because cash is not traceable, who knows if it was “acquired…subsequent to the marriage.”
“Property acquired during a marriage is presumed to be marital property absent clear and convincing evidence establishing otherwise.” In re Marriage of Nelson, 698 NE 2d 1084 – Ill: Appellate Court, 3rd Dist. 1998
Who is going to say, “Oh, I remember this dollar. My mother gave it to me the day before I got married?”
All cash will be marital and, thus, divisible in an Illinois divorce.
“Any doubt as to the nature of the property must be resolved in favor of the finding that it is marital” In re Marriage of Steel, 2011 IL App (2d) 080974
Cash As Income In An Illinois Divorce
The income of both parties is what determines the support of one spouse by another. Parties to a divorce who are paid in cash must declare that cash and have that cash calculated as part of their income.
Maintenance in an Illinois divorce is typically “calculated by taking 33 1/3% of the payor’s net annual income minus 25% of the payee’s net annual income. The amount calculated as maintenance, however, when added to the net income of the payee, shall not result in the payee receiving an amount that is in excess of 40% of the combined net income of the parties.” 750 ILCS 5/504(b-1)(A)(1)
Child support is also calculated by inputting the parties’ incomes
“The court shall compute the basic child support obligation by taking the following steps:
(A) determine each parent’s monthly net income;
(B) add the parents’ monthly net incomes together to determine the combined monthly net income of the parents;
(C) select the corresponding appropriate amount from the schedule of basic child support obligations based on the parties’ combined monthly net income and number of children of the parties; and
(D) calculate each parent’s percentage share of the basic child support obligation.” 750 ILCS 5/505(a)(1.5)
When one party to a divorce is earning cash income but not disclosing that income, it becomes impossible to accurately determine maintenance or child support in their Illinois divorce.
Cash income does not necessarily need to be proven in an Illinois divorce. An Illinois divorce court can just presume what a person makes in cash based on what they would make if they were fully employed.
“If a parent is voluntarily unemployed or underemployed, child support shall be calculated based on a determination of potential income. A determination of potential income shall be made by determining employment potential and probable earnings level based on the obligor’s work history, occupational qualifications, prevailing job opportunities, the ownership by a parent of a substantial non-income producing asset, and earnings levels in the community.” 750 ILCS 5/505(a)(3.2)
“[I]f a court finds that a party is not making a good-faith effort to earn sufficient income, the court may set or continue that party’s support obligation at a higher level appropriate to the party’s skills and experience.” In re Marriage of Sweet, 316 Ill. App. 3d 101, 107 (2000)
“It is well established that courts have the authority to compel parties to pay child support at a level commensurate with their earning potential. If present income is uncertain, a court may impute income to the payor.” In re Marriage of Gosney, 394 Ill. App. 3d 1073, 1077 (Ill. App. Ct. 2009)
How To Prove Cash In An Illinois Divorce
The existence of cash is notoriously hard to prove. That’s why people want cash when they’re getting divorced!
Even seasoned divorce attorneys will openly advise their client’s “forget about the cash.”
“[P]etitioner’s attorney related the terms of a proposed property settlement to petitioner to which she objected, saying that respondent had not accurately represented his assets and liabilities. Her attorney advised her to accept the settlement, telling her that since respondent was in a “cash business” it would be difficult to prove his actual income.” In re Marriage of Perry, 421 NE 2d 274 – Ill: Appellate Court, 1st Dist. 1981
Cash can be traced…if you are diligent.
First, each party to a divorce is granted a chance to honestly disclose their cash holdings and earnings in their financial affidavit.
“In all pre-judgment proceedings in which a party is seeking division of the marital estate, to establish, modify or enforce an order for maintenance, child support, or educational expenses pursuant to Section 513 of the Illinois Marriage and Dissolution of Marriage Act, support for a non-minor child with a disability pursuant to Section 513.5 of the Illinois Marriage and Dissolution of Marriage Act, disposition of property in a civil union, retroactive child support in parentage matters, or attorney’s fees and costs against the other party, each party shall serve a completed affidavit of incomes, expenses, debts, and assets (“Financial Affidavit”) upon the other party on forms approved by the court.” Cook County Court Rule 13.3.1
Every person who fills out a financial affidavit signs under the words, “I certify that everything in the Financial Affidavit is true and correct. I understand that making a false statement on this form is perjury and has penalties provided by law under 735 ILCS 5/1-109”
If the cash is not on the financial affidavit and you can prove it later, the secret cash holder/earner is in big trouble.
“If a party intentionally or recklessly files an inaccurate or misleading financial affidavit, the court shall impose significant penalties and sanctions including, but not limited to, costs and attorney’s fees resulting from the improper representation.” 750 ILCS 5/501
If the cash is undeclared on the financial affidavit (it never is), then the cash must be proven via evidence.
Evidence of cash need not be pictures of cash or a secret ledger of cash holdings and earnings. A party can simply testify that they saw their spouse with cash.
Testimony is a kind of evidence.
“The court must consider all of the evidence…draw reasonable inferences from the testimony, and generally consider the weight and the quality of the evidence.” Kokinis v. Kotrich, 407 NE 2d 43 – Ill: Supreme Court 1980
If a divorce litigant is familiar with how the cash was handled, simply testify to that.
“The wife testified that she made all mortgage payments thereafter, together with all taxes and insurance premiums, out of her own earnings from her employment. The parties had no checking account and the wife made all payments in cash.” Dmitroca v. Dmitroca, 223 NE 2d 545 – Ill: Appellate Court, 2nd Dist. 1967
Cash doesn’t appear from nowhere. Take the testimony of whomever gave the spouse cash. Failure to at least try to prove the existence of cash can be a waiver of the cash’s existence.
In the case of Vendredi vs. Vendredi, the husband, Jacques, simply told the court “we knew she was going to lie about the cash, so I didn’t even bother asking her or her employers about the cash.”
“Although Jacques claimed he knew of the cash payments as early as 1987, he made negligible efforts during this litigation to discover evidence supporting this allegation. He made no attempt to discover information from coworkers regarding Eva’s income nor did he call Mira Horozswski or any of the employees at trial. Although he knew where Eva worked, he did not attempt to discover the names of her co-workers, either by written interrogatories to Eva, or by subpoenas to Mira…. [Jacques] claims that she would have denied paying Eva in cash, and pursuing such discovery would have been futile. If Horozswski testified regarding whether cash payments were made, her credibility would have been an issue for the trier of fact. In our view, respondent’s failure to call Horozswski based upon his assumption as to her probable testimony indicates a lack of due diligence in investigating petitioner’s income. Jacques testified that he believed Eva was paid in cash, and extensively cross-examined her on her income level. Jacques, however, apparently chose not to present any evidence, other than his own testimony” Vendredi v. Vendredi, 598 NE 2d 961 – Ill: Appellate Court, 1st Dist., 6th Div. 1992
The court cannot weigh evidence that isn’t presented…so Eva’s cash stayed with Eva.
The point is, you need to prove that some cash exists by some kind of testimony. Once cash is proven to exist, the burden really becomes the cash holder/earner to establish how much or little cash exists.
“[I]t [is] not necessary here that the independent evidence disprove every possibility, other than theft, that might have explained the disappearance of the cash.” People v. Furby, 563 NE 2d 421 – Ill: Supreme Court 1990
The amount of cash becomes the issue in dispute and the court will consider the testimony of anyone who has an idea about that amount.
Testimony that they “[C]ounted the cash contents of the box more than once, and with the aid of their account books were able to establish a fair degree of proof as to how much cash” Henderick v. Uptown Safe Deposit Co., 159 NE 2d 58 – Ill: Appellate Court, 1st Dist., 3rd Div. 1959
The person who didn’t declare their cash on the financial affidavit will not be believed in their subsequent testimony as to the cash’s small amount.
Testimony about cash rarely feels like enough to establish the amount of cash.
Any additional evidence of the cash will be welcomed by the court. Additional evidence is called “corroborating evidence”
“’To corroborate’ means to add weight or credibility to a thing by additional and confirming facts or evidence, and ‘corroborating evidence’ means evidence supplementary to that already given and tending to strengthen or confirm it.” In re AP, 688 NE 2d 642 – Ill: Supreme Court 1997
For cash, corroborating evidence is evidence of expenses. Purchases that were made in excess of declared income is corroborating evidence of cash.
Cash is like a conspiracy. A conspiracy is a “combination of two or more persons for the purpose of accomplishing by concerted action either an unlawful purpose or a lawful purpose by unlawful means.” Buckner v. Atlantic Plant Maintenance, Inc., 694 NE 2d 565 – Ill: Supreme Court 1998
Two people exchanging cash for a goods and services and not declaring it to anyone sounds like a conspiracy. Therefore, you should argue that cash has the same standard of proof as a conspiracy. Circumstantial evidence is sufficient.
“The existence of a conspiracy can rarely be established through direct evidence. Instead, it must be proven through circumstantial evidence and inferences drawn from evidence, coupled with commonsense knowledge of the behavior of persons in similar circumstances.” McClure v. Owens Corning Fiberglas Corp., 720 NE 2d 242 – Ill: Supreme Court 1999
“[T]he use of circumstantial evidence is not limited to those instances in which the circumstances support only one logical conclusion. Instead, circumstantial evidence will suffice whenever an inference may reasonably be drawn therefrom” Mort v. Walter, 457 NE 2d 18 – Ill: Supreme Court 1983
A divorce litigant working but getting no paycheck. A divorce litigant going out every weekend but not withdrawing money from an ATM or accruing credit card charges. A client paying a divorce lawyer’s retainer in cash. This is all circumstantial evidence of cash…which needs to be divided as marital property and calculated for the purposes of support.
The counter-argument to circumstantial evidence is that it is testimony about something the witness did not see or experience directly and therefore is inadmissible as hearsay or opinion evidence.
Cash And Dissipation Of Assets In An Illinois Divorce
Once cash is discovered and the cash’s amount is approximated…the cash holder needs to explain what happened to that cash.
A notice of dissipation must be filed in regards to any and all cash.
“[T]he notice of intent to claim dissipation shall contain, at a minimum, a date or period of time during which the marriage began undergoing an irretrievable breakdown, an identification of the property dissipated, and a date or period of time during which the dissipation occurred” 750 ILCS 5/503(d)(2)(ii) (emphasis mine)
“[I]dentification of the property dissipated” is the tricky part. A party can say “all cash earned during the course of the marriage” but it will be up to the trial court to determine if that’s sufficient identification.
“The party alleging dissipation must first make a prima facie showing that dissipation has occurred.” In re Marriage of Hamilton, 128 NE 3d 1237 – Ill: Appellate Court, 5th Dist. 2019
Prima facie means “sufficient to establish a fact or raise a presumption unless disproved or rebutted.” Black’s Law Dictionary (11th ed. 2019)
“[I]n many cases, the prima facie evidence of dissipation consists of large withdrawals of cash from the parties’ bank accounts…A prima facie showing of dissipation can also be made, as it was in this case, by showing that cash withdrawn…by a spouse over a period of months or years added up to a substantial amount.” In re Marriage of Hamilton, 128 NE 3d 1237 – Ill: Appellate Court, 5th Dist. 2019
If the trial court accepts the notice of dissipation of cash acquired during the marriage, the other party must prove what happened to that cash.
“Dissipation is defined as the use of marital property for one spouse’s sole benefit for a purpose unrelated to the marriage at a time when the marriage is undergoing an irreconcilable breakdown.” In re Marriage of Tietz, 605 NE 2d 670 – Ill: Appellate Court, 4th Dist. 1992
“The general principle is that a person charged with the dissipation is under an obligation to establish by clear and specific evidence how the funds were spent…General and vague statements that the funds were spent on marital expenses or to pay bills are inadequate to avoid a finding of dissipation.”In re Marriage of Petrovich, 507 NE 2d 207 – Ill: Appellate Court, 2nd Dist. 1987
While vague statements about cash cannot be considered as a defense to dissipation, any documentation coupled with credible testimony may adequately prove the cash was spent for a marital purpose.
“[While the alleged dissipator] could not recall the nature of specific expenditures and dates for those expenditures,he provided the court with the relevant financial records and testified to his routine use of cash…[allowing] the trial court [to find the alleged dissipator’s] testimony regarding the cash withdrawals was credible….In making its decision as to dissipation, the trial court must determine the credibility of the spouse charged with dissipation.” In re: the Marriage of Berberet, 2012 IL App (4th) 110749
Failure to prove that the cash was spent on a marital purpose means that the cash will be considered when dividing the marital assets that can be adequately ascertained.
For example, a finding that a party acquired and spent $ 50,000 in cash may result in an additional award of $ 25,000 in marital assets to the other party.
Cash is king…until a good divorce lawyer starts asking the right questions. If you would like to discuss the cash in your marriage, contact my Chicago, Illinois family law firm to learn more from an experienced Illinois divorce attorney.
