1.     Why do people want to hide assets in divorce?

LDR:. Some people don’t disclose assets because they haven’t received legal advice about their ongoing duty of full and frank disclosure.

KH: People often fail to disclose assets because they want to withhold information from their spouse and the courts in a bid to limit the financial claims their spouse may have against them. There are serious repercussions for attempting to and/or hiding assets and it has far-reaching consequences.

LDR: Whatever the reason, non-disclosure is not tolerated by the court. Ultimately it can increase stress, legal fees and acrimony for both parties when deciding how assets should be split.

2.     How do people conceal assets in divorce?

LDR: Methods of concealing assets vary widely. People may choose to transfer money from their main bank account to secondary bank accounts that they then fail to disclose, alternatively they may transfer money to a new partner or family member. Others fabricate loan agreements, transfer money overseas or attempt to disguise funds in complex business structures.

KH: There are a number of ways that somebody may choose to conceal their assets, depending on the nature of the assets involved. Aside from those already mentioned, people may also tie up their money in investments, direct them to offshore accounts, or incorporate them into complex trust structures. We regularly see cryptocurrency being used as a vehicle to hide funds as there is a perception that this is difficult to trace.

A spouse may also try to conceal their true level of income by redirecting it or simply not disclosing all sources of income whether from a business, trust or investment.

3.     What are the legal consequence of failing to disclose assets in divorce?

LDR: There is an ongoing duty of disclosure within financial remedy proceedings. A failure to disclose can result in a penal notice and contempt of court proceedings against the non-discloser which can carry a fine or result in imprisonment.

KH: If there are suspicions that assets or income are not being disclosed during court proceedings, there are a number of sanctions available to the court. These include mechanisms such as third-party disclosure orders, or an order that one party receives a larger share of the disclosed assets.

If the non-disclosure becomes apparent following the conclusion of the financial remedy process, any previous order could be set aside and the case re-opened for the court to determine what the true settlement should be, taking into account all the assets.

4.     How can you track or find hidden assets in divorce?

KH:. We undertake a thorough analysis of any financial disclosure provided and using our expertise we consider where there may be gaps, identify patterns that may suggest non-disclosure and isolate evidence that points to be hidden assets or income.  We will raise a detailed questionnaire to address these issues, seek clarification and further disclosure. If we are still not satisfied that full disclosure has been provided, we can work closely with our network of forensic experts to interrogate the disclosure and resolve any remaining issues.

LDR: Hiding assets will almost always result in a digital footprint/paper trail that can be traced by experts or via evidence in bank statements or information disclosed as part of the financial remedy process.

5.     Can you prevent someone hiding assets in divorce?

LDR: Instructing a solicitor who specialises in non-disclosure of matrimonial assets is always a good place to start. They can advise you of your options and the best next steps. I also think clients usually have some understanding of their spouses’ finances and the lifestyle they could afford to maintain. This makes a clients input and insight so important and a collaborative approach is often one of the most effective tools.

KH: Once instructed we can take practical steps such as applying to the court for injunctive relief or a freezing order. This is a complicated area of family law and a solicitor who specialises in non-disclosure of assets and matrimonial finance will have the expertise to work quickly and effectively with their clients to uncover the true extent of the asset base.