My Ex is Hiding Assets in Divorce Proceedings

A beautiful wife investigating her husband about hiding money.

If you think your ex-partner is hiding assets in divorce proceedings, it is best to get expert family law advice on your options.

Contact Evolve Family Law for expert divorce and financial settlement advice.

The requirement for financial disclosure in divorce financial settlements

Divorce solicitors will tell you that husbands and wives are under a duty to provide full and frank financial disclosure of their assets when negotiating a financial settlement. That applies whether you are negotiating a financial settlement through:

Direct discussions.
Solicitor negotiations.
Family mediation.

Financial disclosure is also a requirement if a family law judge or an arbiter is deciding the financial settlement in financial court proceedings or through family arbitration.

The extent of financial disclosure

The court has a standard list of financial disclosure requirements, but a husband or wife can request additional information and ask questions. The judge will decide if the extent of the additional questions and the request for extra documents is relevant and proportionate.

You may not want to engage in extensive financial disclosure if:

Both of your finances are straightforward, and
You both had access to bank statements and assets, so you know that money has not been moved from accounts, and
You can reach a negotiated financial settlement.

Every family situation is different. You probably know if your ex-spouse has hidden financial information and assets from you throughout your marriage. Alternatively, you may suspect that they started doing so when they met someone else, or when the marriage got into difficulties, and the relationship started to drift apart.

Red flags and financial disclosure in financial proceedings

If your husband or wife appears keen to reach a clean-break financial settlement without providing financial disclosure, this may raise a red flag for your divorce solicitor. The family lawyer may question why your spouse objects to financial disclosure and why they are pressing you to reach an agreement so quickly.

You need some minimum paperwork to check your spouse’s financial settlement proposals and for the court to be with the terms of a proposed financial court order that a family law judge is asked to make.

If an estranged spouse is trying to pressure you to agree to a financial settlement without first providing financial disclosure and wanting you to accept their word about the extent of the assets or their current value, then you should consult a financial settlement solicitor. Your ex-partner might be totally honest and want to ‘cut to the chase’ and get a binding court order, but you are entitled to see the required financial disclosure and to take family law legal advice on their financial proposals and the wording of the court order.

Reasons why assets are hidden from spouses

There are many reasons why an ex-spouse may try to hide assets or minimise their value. Divorce solicitors come across these common excuses:

It is inherited or gifted money.
It is savings from one spouse’s income.
The ex-spouse’s new partner owns their current house, and the ex-spouse says they have no right to any equity in the property.
There is no need to get a business, pension or other asset valued, as your ex thinks you should take their word that the asset either has no value or is not sellable.
Money was owed to a family member and was transferred to them to repay a loan rather than to hide assets
Cash put into additional bank accounts was forgotten.
An ex thinks property owned abroad or owned before marriage is irrelevant to the financial settlement and should therefore not be disclosed.

These are all excuses. None of them is a good reason not to provide complete financial disclosure. Sometimes an asset will not be relevant to a financial settlement, but your financial lawyer needs to know about the asset and its current value so they can advise you on its relevance in your family circumstances.

For example, a pension accrued before a short marriage with a cash equivalent transfer value of £10,000 may not be of significance. Your ex may waste their time and money by trying to hide an asset that may be of limited relevance because of the duration of your marriage or your ages. However, by failing to disclose the pension, you and the court may be far more sceptical about whether your ex-spouse has fully disclosed the existence of the pension or how honest their other financial disclosures are. For example, you may question the extent of your ex’s declared self-employed income or the reason they have transferred money to a sibling or new partner.

Steps to take if an ex is hiding assets

If you are separated or getting divorced and believe your ex is hiding assets, you may need urgent financial settlement advice and help with an injunction application to safeguard and preserve the money until the court makes a financial order.

Examples of when a spouse may require a financial injunction include:

Your ex is transferring money or property to a third party.
Your ex is putting their pension in payment and taking the maximum tax-free cash sum to put the money out of your reach.
Your ex is syphoning money out of the family business to make sure the family business has a lower value placed on it, as profits will be reduced.
Your ex is buying property overseas or transferring assets abroad.
Your ex is moving money out of joint bank accounts and putting it into cryptocurrency or bitcoin.

Financial injunction applications

A financial injunction order is a temporary measure to stop your ex-spouse from hiding or disposing of assets.

It is best to consider applying for a section 37 injunction rather than assume that, in financial settlement court proceedings, your ex-spouse’s new partner, parent, or sibling can be joined to the financial application to try to unravel the transfer of assets.

If you have not already done so, a divorce solicitor will also advise you to start financial court proceedings for a financial court order. Within the financial remedy application, the court can make financial disclosure orders that your ex will need to comply with.

Consequences of noncompliance with financial disclosure rules

If your ex does not comply with the financial disclosure orders, then you can ask the judge to enforce the disclosure orders against your ex or ask the court to draw inferences. For example, if the court ordered disclosure of historical bank statements to reveal what happened to the equity of £100,000 after the sale of a buy-to-let property. If your ex flouts the disclosure order, you can ask the court to draw inferences as to why and ask the court to add back in the £100,000 so you get a greater share of the other family assets.

Financial proceedings and ex hiding assets

If you have started financial proceedings and you are not satisfied with your ex’s Form E financial disclosure, a specialist family solicitor can review the financial disclosure with you and draw up a list of additional questions and request extra non-standard paperwork.

For example, if your ex-spouse is the director and shareholder in a family business and you suspect they have been syphoning money off to their new partner by creative accounting or use of the director’s loan account, you can ask for a forensic accountant to value the business and look at the accounting concerns.

Alternatively, you can ask the court to make financial disclosure orders to help you investigate if:

Your ex is self-employed, and the family lifestyle does not match their declared earnings.
Your ex has withdrawn significant sums from a business or personal account, and the withdrawals are not their usual pattern of spending.
Your ex previously mentioned an asset that was a rainy-day asset or pension, but there is no mention of the asset in their financial disclosure.

There are lots of ways a tenacious divorce solicitor can ‘get to the bottom’ of financial disclosure, through your background information and knowledge of your ex, combined with financial disclosure orders, valuations and freezing injunctions.

Contact Evolve Family Law for expert divorce and financial settlement advice.