To temper that doubt, good divorce attorneys put a “finders keepers clause” in their Marital Settlement Agreements.
A finders keepers clause specifies how hidden assets will be divided if the hidden assets are eventually found.
Why Does A Marital Settlement Agreement Need A Finders Keepers Clause?
‘[M]arital property’ means all property, including debts and other obligations, acquired by either spouse subsequent to the marriage” 750 ILCS 5/503(a)
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)
An Illinois divorce court can only divide marital property that the court is aware of.
Parties are supposed to disclose all of their assets to each other in an Illinois divorce. The reality is that the parties only have to disclose the assets they are asked about.
“Information is obtainable as provided in these rules through any of the following discovery methods: depositions upon oral examination or written questions, written interrogatories to parties, discovery of documents, objects or tangible things, inspection of real estate, requests to admit and physical and mental examination of persons.” Ill. Sup. Ct. R. 214(a)
All of the available methods of discovery are requests of one person to another.
If a party doesn’t know about an asset, how can they ask about it?
If a party doesn’t know the asset exists, how can they know the other party didn’t disclose that asset?
There is a lot of trust and even more double-checking involved in the Illinois divorce discovery process.
If you can’t have faith in your soon-to-be-ex-spouse’s veracity and cannot do the serious due diligence to assure yourself of their assets, the parties can agree that any “rediscovered” marital assets will be divided in the future.
These Marital Settlement Agreement clauses regarding undisclosed and later discovered marital assets are often called “finders keepers” clauses.
What Does A Finders Keepers Clause Look Like In An Illinois Marital Settlement Agreement?
A finders keepers clause must first memorialize what assets were disclosed between the parties. Assets are typically listed in a spreadsheet and attached to the Marital Settlement Agreement as an exhibit .
“The parties have both fully disclosed all of their assets (which are set forth in Exhibit ‘A’ attached hereto and made a part hereof and which assets are being equally divided pursuant to the balance sheet and the terms of this Agreement), liabilities, and income, and that each is fully conversant with the assets, liabilities and income of the other party.”
The finders keepers clause then specifies what happens if there’s a marital asset discovered that was not on this exhibit.
“In the event there are additional marital assets discovered not otherwise set forth in this agreement, upon disclosure/discovery of an additional marital asset, said marital asset shall be divided between the parties as follows: fifty percent (50%) to Wife and fifty percent (50%) to Husband using the greater of (a) the value of the asset at the time the property is discovered or (b) value of the asset on the date of entry of a Judgment for Dissolution of Marriage.”
Note: This is an actual finders keepers clause that was upheld in In re Marriage of Hyman, 2023 IL App (2d) 220041. So, if you use this language, it will almost certainly be enforced.
In reality, you can contract for anything in an MSA so long as it’s not unconscionable. You could contract for a true finders keepers clause where the spouse that finds their former spouse’s undeclared asset is automatically awarded that asset. Is awarding someone 100% of an unknown asset unconscionable? If the asset was hidden, probably not.
Ensuring That A Finders Keepers Clause In A Marital Settlement Agreement Is Enforceable
Illinois courts do not like leaving open the possibility that divorced parties could come back to court on property issues.
“In distributing property, courts should seek a high degree of finality so that parties can plan their future with certainty and are not encouraged to return repeatedly to the courts.” In re Marriage of Hellwig (1981), 100 Ill. App.3d 452, 459, 426 N.E.2d 1087, 1092.
Normally, an Illinois divorce court will say “you didn’t ask about an asset during the divorce…so, too bad.”
“A divorcing party will not be relieved of the consequences of her own lack of diligence in failing to discover such information relevant to the divorce proceeding.” In re Marriage of Lyman, 2015 IL App (1st) 132832,¶ 78
“A representation and warranty of full disclosure in a marital settlement agreement, even when the full disclosure is confirmed by affidavit…cannot be used as an escape hatch to avoid the consequences of failing to act diligently in the first instance by engaging in sufficient discovery, a proposition that has been long established in Illinois law.” In re Marriage of Goldsmith, 2011 IL App (1st) 093448, ¶ 51.
The argument that a spouse failed to exercise due diligence regarding discovery only applies if the spouse is trying to, now, throw out the divorce agreement because of the discovery failures.
“When a section 2-1401 petition is based on newly discovered evidence, the petitioner must show that the new evidence was not known to her at the time of the proceeding and could not have been discovered with the exercise of reasonable diligence….[Instead, a party can validly] petition the court to enforce the MSA as it was entered into by the parties and incorporated by the trial court in the judgment of dissolution.” In re Marriage of Hyman, 2023 IL App (2d) 220041
In re Marriage of Hyman specifically allows the enforcement of finders keepers clauses and distinguishes In re Marriage of Goldsmith’s refusal to “throw the baby out with the bathwater” if there has been inadequate discovery requests or production.
Make sure your Marital Settlement Agreement has a finders keepers clause or you may find yourself to be a “loser” and a “weeper.”