We all know that it goes on; the press is always full of stories about international or multi-millionaire families involved in divorce and financial settlement cases where there are accusations that a husband or wife has hidden assets.
It is not surprising that there are allegations of hidden assets in divorce proceedings when, after all, divorce proceedings are often started because of a lack of trust in a relationship. The fact that a spouse has had an affair can make a husband or wife to lose emotional and financial faith in a spouse. When a separation is imminent or divorce proceedings are started, past actions and financial behaviours can take on a new significance.
You do not need to have the assets of a multimillionaire to worry about a spouse hiding assets in divorce and financial proceedings. The hiding of money or property in divorce and financial cases of more modest means is just as worrying and may even have a more profound effect on the financial settlement.
Examples of hiding assets in divorce
The best Cheshire divorce solicitors will tell you that there are numerous ways in which assets can be hidden during a divorce, and there are warning signs, including:
- A spouse being secretive about money and not telling you about how many bank and savings accounts they hold;
- If a spouse is self-employed or is in business and starts to use cash in all transactions whilst telling you that the business is doing badly;
- If a spouse has boasted of their ability to hide things from you or has previously told you that he or she hid assets from their former spouse during earlier divorce and financial proceedings ;
- You think that your spouse has transferred money or property to a relative to hide the assets from the divorce and financial proceedings.
Hiding assets – the cost of recovery
There are many different and clever ways that a determined and devious spouse can hide money and property in divorce and financial settlement proceedings. However, most Cheshire divorce solicitors are equally determined to trace hidden assets to ensure that everything is ‘’in the pot’’ and can be taken into account in the divorce financial settlement.
When a divorce solicitor is looking for hidden assets, they need to:
- Work as a team with their client – after all a spouse knows her husband or wife best and will potentially have lots of invaluable information , even if they do not always appreciate just how important their information is to the solicitor;
- Look at the cost benefit ratio- there is no point in running up a big solicitor’s bill or instructing a forensic accountant to pour over company accounts unless the extra work and costs is likely to produce more by way of financial settlement than the extra costs incurred. That is because you cannot guarantee that a court will order a spouse to pay your costs in tracing assets. It is a pointless victory if the bigger financial settlement is swallowed up by extra legal costs.
- Look at the bigger picture and use their expertise to assess a case before embarking on tracing hidden assets. For example if a husband and wife have been married for twelve months the likely size of the financial settlement , based on the length of the marriage, may not be effected by whether the solicitor can discover hidden assets. That is because the short length of the marriage may be of overwhelming importance to the size of financial settlement, rather than the extent of the family assets.
Financial disclosure and hiding assets
In financial court proceedings, a husband and wife are obliged to provide ’’full and frank’’ financial disclosure to their spouse. That does not always happen. Additional enquiries, such as questionnaires and single joint expert and shadow expert reports can be commissioned to trace assets. Sometimes a solicitor can spot that a spouse is trying to hide money, property or income through:
- Transferring money out of a bank account as cash and saying that the cash has been spent but really opening a secret bank account with the cash;
- Producing incomplete internet transaction histories for bank accounts to try to avoid revealing entries;
- Saying that money taken out of a savings account was to repay family debt but the debt was artificial, with the plan being for the ‘’debt’’ to be repaid after the financial proceedings are finalised;
- Pretending that they do not own a new property. A simple search of the Land Registry can reveal the truth about property ownership;
- Not disclosing the existence of family trusts or inheritances.
These are just the tip of the iceberg when it comes to hiding assets in divorce proceedings.
The best thing that you can do if you suspect that your spouse is hiding or has hidden assets is to take legal advice from a specialist and experienced Cheshire divorce solicitor such as Evolve Family Law. We will be able to help you weigh up the pros, cons, and costs of tracing the hidden assets.
For information about financial settlement options or for representation in financial court proceedings please call us on +44 (0) 1477 464020 or contact Robin Charrot