My Husband/Wife is Hiding or Disposing of Assets on Divorce

Unfortunately, in this world money and the retention of it appears to be more important to some people than anything else.

I am regularly involved in cases where Husbands or Wives either try to hide their assets from their spouse, and/or the Court, or they try to dispose of a known asset in an effort to put it beyond the reach of the Court.  “What can be done?”  I hear you say.

Firstly, let’s break these issues down.

Hiding Assets Upon Divorce

A crucial part of any divorce is the disclosure of one’s financial circumstances.  Only with the benefit of financial disclosure, by both parties, can I begin to provide advice or can a judge begin to determine how the assets should be divided upon divorce.

The courts say that financial disclosure should be “full, frank and clear”.

Unfortunately, some people are not prepared to provide their disclosure in this way.  That is not an easy thing to tackle but over the years I have developed various strategies and techniques to uncover hidden assets upon divorce.

More often than not, there is a paper trail.  Knowing the right documents to ask for is key.  One document that can often unlock doors is a party’s tax return.  The tax return, and the supporting tax calculation summary, will often highlight various sources of income which might include additional properties or additional assets that generate some form of income.  Asking for a credit report can be another helpful document although, these are not routinely ordered by the Court.  It is my personal view that the production of a full credit report should be mandatory in all divorce cases.  Bank statements are mandatory with the Form E and careful scrutiny of them is recommended.

If you know that your Husband or Wife has hidden an asset, sometimes the only way to ensure its production is through Court proceedings.  Judges have far reaching powers to order one party to disclose their assets or financial circumstances.  The Court can even order third parties, such as banks, to provide documents that may assist. 

Preventing Disposal of Assets

Some spouses actually try to dispose of their assets to put them out of reach of the Court.  They might give assets away, sell them at an undervalue or spend liquid cash to tie up money. 

If people are prepared to go to these lengths it will almost certainly require judicial intervention.

The Court does have the power to make a Freezing Injunction, if it can be shown that one party has an intention to dispose of their assets with the intention of defeating their spouse’s claims.

However, one should be very careful before issuing an application for a Freezing Injunction.  There is specific case law that provides guidance on how these applications should be approached.  It is crucial to take legal advice. 

Before issuing a Court application it is often prudent to seek assurances, or better still an undertaking, from your spouse that they will not dispose of an asset.  If the spouse is unwilling to provide assurances or an undertaking it may be necessary to issue an application for an injunction.

There are other ways to preserve assets.  For instance a Notice of Home rights can be registered at the Land Registry in respect of the family home.  This might prevent the sale or remortgage of a family home that is owned in the spouse’s sole name i.e. not owned jointly.  There are also other applications that can be made to the Land Registry to prevent the other party selling or disposing of their property assets. 

It is worth noting that the Court even has the power to set aside a disposition i.e. to reverse a transaction that might have already taken place.  For example, if a party were to sell shares at a significant undervalue, the Court has the power to reverse that transaction.

If an application to the Court is required, the Court also has the power to order the losing party to pay the other party’s wasted legal fees.  Careful consideration is therefore required before taking the matter to Court. 

Also Consider…

If there is a company or companies it is crucial to instruct a solicitor that has knowledge and experience of companies upon divorce.  I have worked on divorces involving companies for over 20 years.  I often work with forensic accountants in order to investigate companies and to ascertain value, liquidity, tax issues and sustainable income.

With pensions it is possible to search the Pension Tracing Service.  This has the capacity to uncover hidden or undisclosed pensions.

Should you experience a case where you suspect your spouse is hiding or disposing of assets or if you simply don’t know what assets your spouse has please do get in touch.  Either myself or one of my colleagues will be able to help.