Wisconsin Family Lawyer Blog
About once a year here at Wessel, Lehker & Fumelle we encounter an opposing party who is intent on hiding income. A party’s income, of course, is highly relevant information for purposes of setting maintenance (alimony), establishing child support, or changing the amount of maintenance or child support. Some support payers are working on perfecting the art of hiding or disguising income or assets, treating the support recipient much like they probably treat the IRS.
The signs are often fairly obvious. A party may report an income that barely covers expenses, yet take lavish vacations or acquire expensive toys. Or a party, often self-employed, may report an income that is substantially lower than it was before the parties split. Sometimes a party reports the former partner’s penchant for half-truths and misrepresentation. A party’s exhaustive or creative opposition to reasonable financial disclosure may signal interesting records.
Fortunately, the statutes authorizing access to information are broad in Wisconsin. Wisconsin Statutes Chapter 804 authorizes discovery of all “relevant” information, whether or not it is actually admissible at trial. And courts have little tolerance for parties who play loose with the facts. Once we can show some manipulation or lack of candor, courts are often willing to authorize a deeper investigation or impute income. We have also found that when the opposing party realizes that we are not simply going to accept the represented income as the whole truth, a reasonable settlement suddenly becomes more attractive.
Conversely, we sometimes have clients or potential clients who try to enlist us in their efforts to hide income or assets. We always push for full, accurate disclosure – not only because it’s the right thing to do, but also because any other course exposes a party to significant risk. In Marriage of Lellman, for example, the trial court estimated Lellman’s net income at $100,000, rather than the $11,000 Lellman claimed. The court of appeals affirmed: “Because Lellman did not produce the necessary financial records and because he intentionally misrepresented both his income and expenses, the trial court was left to determine a reasonable figure attributable to Lellman as a net annual income. . . . [N]ot only may Lellman’s conduct be punishable as contempt or perjury, but [] it was Lellman’s misconduct that placed the court in the position of being required to make reasonable approximations. Lellman cannot be heard to complain that this approximation was excessive when the precise information available to make that determination was in his exclusive control.” Lellman also was ordered to pay his former wife’s attorney fees.
If necessary, we will withdraw from a case rather than ignore a client’s unethical behavior.