A divorce can create a lot of challenges, with one of the most contentious aspects being the division of assets. Uncovering concealed assets can significantly impact the property settlement, and understanding the intricacies of this issue can make all the difference in achieving a fair outcome.
In this article, we will explore the concept of hidden assets in a divorce, common methods of concealment, the legal framework, detecting hidden assets, and the steps to take if you suspect your spouse of hiding assets. We will also delve into the consequences of hiding assets in a divorce and provide preventative measures to protect your assets legally.
What does it mean to hide assets?
If a party is accused of holding hidden assets, usually it is asserted that the party is not being candid or is deliberately attempting to avoid demonstrating their true financial circumstances. There are various reasons why a spouse might hide assets, including:
- Protecting assets from being divided in the divorce settlement
- Minimising the amount of spousal support or child support they may have to pay
- Avoiding taxes or other financial obligations
Each spouse is obligated to provide the other with information and documents pertaining to their financial circumstances during the property settlement process. This is the case for matters which are litigated in Court and matters which are resolved by agreement.
Concealing assets in a divorce is prohibited and considered immoral, as it affects the asset pool to be divided. There may be significant consequences for a party if they are found to have concealed assets.
Common Ways Assets Are Hidden
Some common techniques employed to disguise assets include:
- Understating income
- Exaggerating liabilities
- Transferring assets to third parties
- Utilising offshore or overseas accounts/investments
- Using hard currency/cash
For instance, a spouse might transfer a significant amount of money to a family member or friend, claiming it to be a loan repayment. Loan repayments to family and friends are frequently contested in family law matters. Once the property settlement is finalised, the money could be immediately transferred back to the spouse who initially concealed it as part of the financial settlement.
Disclosure
In Australian family law, both parties are obliged to provide a full disclosure of their assets, liabilities, superannuation, and financial resources during the property settlement process. The court determines the primary documents that must be produced, and additional disclosure may be necessary depending on the particular matters or areas of disagreement.
The purpose of financial disclosure is to ascertain and confirm the financial standing of each party and validate the financial standing of their former spouse. A frank disclosure of assets is crucial, as concealing assets can result in considerable legal repercussions.
Detecting Hidden Assets
If you suspect your spouse is hiding assets, there are several strategies you can employ to uncover them. For the purpose of proper due diligence, parties involved in property settlement disputes should:
- Review financial statements
- Review tax returns
- Review other documents
- Seek legal counsel from a family lawyer experienced in divorce and property settlements.
Family lawyers, forensic accountants, and private investigators can also be invaluable resources in detecting hidden assets. Some ways they can help include:
- Forensic accountants examine financial documents to identify discrepancies and possibly undisclosed resources.
- Private investigators can gather evidence and conduct surveillance.
- Family lawyers can navigate the legal process and obtain court orders if necessary to access certain financial records or documents.
What to Do If You Suspect Your Spouse is Hiding Assets
Should you have suspicions about your spouse hiding assets, it’s advisable to promptly consult a legal professional. An experienced family lawyer can assist you in examining bank statements and financial statements to help investigate any concealed assets and financial resources. Furthermore, your legal advisor can provide direction on suitable measures to address your concerns, such as initiating legal proceedings and seeking remedies.
By seeking legal advice early, you can better protect your interests and ensure a fair settlement in the property division process.
Consequences of Hiding Assets in Divorce
Hiding assets can lead to significant legal consequences, such as costs orders, findings of contempt and in some circumstances, even imprisonment. Financial repercussions may also occur, with the court potentially revisiting the property settlement and imposing penalties if additional assets are discovered after the settlement has been finalised. A property settlement obtained by fraud can be set aside by the Court after the making of Orders.
Furthermore, hiding assets during divorce can negatively impact one’s reputation, reflecting a lack of trustworthiness and honesty. Honesty and transparency during the property settlement process are not only key to a fair outcome but also to preserving your credibility and reputation over time.
Preventative Measures and protecting Your Assets Legally
One way to protect your assets legally and prevent potential disputes over hidden assets is to enter into a prenuptial agreement or a binding financial agreement (BFA). These legally binding agreements delineate how assets will be distributed in the eventuality of a divorce or separation and can provide a level of certainty and security for both parties.
However, keep in mind that Courts can set aside legally binding agreements under certain circumstances, like if the agreement was signed under duress, if there was misinformation, or obtained by fraud. To ensure the enforceability of your agreement, seek legal advice from a family lawyer with expertise in drafting and reviewing such agreements.
Summary
Having an experienced family lawyer, experienced in understanding and locating hidden assets in divorce proceedings is essential for ensuring a fair property settlement. Our experienced family lawyers are experienced in dealing with complex property matters where assets have been hidden and know the steps to take if you suspect your spouse is hiding assets. Our expert family lawyers can help protect your interests and achieve an equitable outcome. The consequences of hiding assets in divorce can be severe, both legally and financially, and can damage one’s reputation. By engaging in preventative measures, such as prenuptial agreements or BFAs, and seeking legal advice from experienced family lawyers, you can safeguard your assets and navigate the complexities of property settlements with confidence.
We Can Help You
If you have recently separated and you are concerned about achieving a fair outcome or you suspect that your spouse may be hiding assets, we can help you.
Our experienced family law team will work closely with you to understand and assess your situation and then plan a course of action that will ensure you receive a fair property settlement. Our many years of experience in dealing with high value property settlement proceedings means that we’re well-versed in the methods people may use to hide assets as well as the signs of misinformation.
You can put your trust in our family law team. Call us on 02 9929 8840 or book a consultation online here.