What to do if your spouse does not disclose their assets in a divorce
By Vanessa Lloyd Platt, Lloyd Platt & Co
Divorce can be an emotionally and financially draining process, and one of the most critical aspects is achieving a fair division of assets. In any divorce case, there has to be full disclosure for a lawyer to advise about the overall financial settlement.
However, what happens when one spouse attempts to hide assets in an effort to gain an unfair advantage? Let’s explore the issue of attempting to hide assets in a divorce and what steps you can take if your spouse does not disclose their financial holdings.
Hiding Assets in a Divorce
Hiding assets in a divorce is not uncommon, and it can take various forms. Some individuals may transfer money to offshore accounts, dispose of assets, or underreport their income to reduce the financial settlement they are obligated to provide. Such actions undermine the principles of fairness and full disclosure, which are fundamental in family law proceedings.
The Importance of Financial Disclosure
In a divorce, both parties are legally required to provide full and frank disclosure of their financial circumstances. This transparency is crucial to ensure a fair financial settlement. Without accurate information, the court cannot make informed decisions regarding asset division and support payments.
There are many ways in which disclosure can take place and methods of dealing with a divorce case which are in essence:
- a) Through the mediation process.
- b) Through voluntary disclosure by financial information being exchanged through solicitors.
- c) Arbitration process, where information is provided to an arbitrator who will impose an arbitration decision.
- d) Through collaborative law where both parties and solicitors sign up that they will not go to court but will negotiate an overall settlement
- e) Hybrid methods introduced through solicitors over the last few years either through private financial dispute resolution hearings or otherwise.
The Process
In the mediation process some mediators ask for less disclosure than required before the court. It is preferable whichever method is chosen for parties to make disclosure, on a disclosure form known as a Form E. This document was created by a medley of Judges who feel the information provided on this gives a snapshot of the parties’ finances to enable them to reach a decision on the case.
Form Es can be obtained from your solicitor or from the court website. Even if a case is not before the Court, whether it is mediation or arbitration or in a private financial dispute resolution hearing, the parties are expected to make full, proper, and honest disclosure with documentation proving their assets. This applies to all forms of income, capital, pensions, investments, businesses etc.
Honesty is Vital
Every spouse or cohabitee is expected to make disclosure in an honest manner, because hiding assets in a divorce is immoral and illegal. So, this means there should be no attempt prior to the disclosure, to try to dissipate, lessen or transfer their assets to defeat the claims of the other party. Most parties are honest and do make proper disclosure of their assets. These days much can be corroborated through lawyers.
Investigating Assets
It is very important that your divorce lawyer does their homework in relation to the assets disclosed. A preliminary check of Land Registry in relation to any properties disclosed will show that they are held jointly or by one of the spouses only or by other parties, or companies.
If documents are attached to a Form E these should also be checked by the lawyer to ensure that there is a full run of at least one year’s worth of bank statements from each account that has been opened during the last twelve months.
If documents or information is missing, a schedule of deficiencies should be served on the other side with the demand that they produce them. Insurance policies should be checked to make sure that they are still in existence and the full extent of what they cover.
Pensions are important in terms of negotiation in any divorce financial case. The full value of any pensions must be obtained with the page in the Form E related to pensions to be filled in properly and fully with documentary evidence in support. The rules of the pension plan should also be attached if possible so if there are any exclusions they are known.
Commonly Concealed Assets
Assets in a divorce that are often left out by a dishonest spouse are details of bank accounts and savings accounts, particularly those held offshore and properties that have been acquired in a clandestine manner in the hope that these will not be picked up. Payments received by way of rent for a property not disclosed can often also fail to be disclosed particularly if payments have not been disclosed to the Revenue.
If you believe that your spouse has either transferred money or hidden assets to defeat your claims or has failed to disclose their assets in part or at all, then you must apply to the court to ensure that court orders can be made to produce those items that have been missed out.
If you believe that your spouse or ex-partner holds assets abroad, it may be worth appointing investigators or forensic accountants to discover whether there are properties, land or assets held in another jurisdiction which can be included as part of the assets in your divorce.
If your spouse intends to be dishonest, then only the court process will flush this out with appropriate investigations. If necessary, if you believe that assets are being hidden within an existing business, a forensic accountant should be appointed either on a sole basis or jointly between the parties to fully investigate the worth of a company, its cash flow or capital value.
Dealing with Deception
Regrettably, some spouses think it fair game to be dishonest and withhold financial information in a divorce. Invariably they will be found out and if they are, the Court will punish them by making certain assumptions or actual findings against them and their financial settlement will be reduced and yours increased, with orders for them to pay some or all of your legal fees.
If you do discover that your spouse has lied, you can reopen a financial settlement on the basis of fraud or misrepresentation where the undisclosed monies would have made a difference to the settlement. This must be done immediately if you discover the fraud or misrepresentation. Any delay will mean that the settlement will not be reopened.
How Lloyd Platt & Co can help
Divorce and financial settlements should be conducted with transparency and fairness but attempts to hide assets can complicate matters. If you suspect that your spouse is attempting to conceal their wealth during divorce proceedings, it’s crucial to seek legal advice, gather evidence, and take the necessary steps to ensure a just resolution.
By working with experienced professionals and following the legal process, you can protect your rights and secure a fair outcome in your divorce case. Read more about this topic in our articles on Hiding money during a divorce, The need to disclose in divorce cases, Can a divorce settlement be reported, and see our Guide on how to get a divorce for more information on the divorce process.
If you want to discuss hiding assets in a divorce, or any other aspect of divorce and separation, please fill in our form, call us on 0208 343 2998 or click to contact our divorce and family lawyers in London.
