So you think your ex is hiding assets? Family lawyer Mark Harrop is giving you ten important considerations to make
At Family Law Partners we do our best to keep our clients out of the court process if we can, using all the tools family lawyers have at their disposal, including mediation and collaborative negotiation processes. The primary objective is always to try to agree settlements in a respectful way. Sometimes, however, that simply isn’t an option. One of those occasions is when one party is not being honest about their finances:
1 Understand what you are letting yourself in for
There is no faster way of making a divorce slow, expensive and acrimonious than accusing your ex of lying about their wealth. Court proceedings are almost inevitable. Your relationship with your ex is likely to be permanently damaged, and many people end up having bitter arguments about their children as a result. Mutual friends and family members will feel forced to take sides or distance themselves from both of you. Life is likely to be pretty horrendous for a while and irreparable damage can be done to several relationships.
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2 Reality check
Most people don’t try to hide significant wealth in divorce proceedings. Many undervalue their assets, claim they really belong to someone else, or ‘forget’ to include certain assets or accounts in their disclosure, but those can all be dealt with without having to accuse them of deliberately hiding assets. Successfully putting wealth out of reach generally requires some serious planning, probably years before the divorce. Sometimes, as hard as it may be to accept when in the headlights of a separation when emotions are running high, people just live beyond their means.
3 Identify what is driving your concerns
Write down why you think your ex is lying about their assets. It may be something they have said in the past, a lack of bank statements for an account you know exists, or a lifestyle that is inconsistent with their income. Then write down what evidence you would need to convince you that nothing was hidden after all. Later in the process you can check your ex’s answers against this list, which will help ensure you don’t pursue things too far out of anger or wishful thinking. Be aware that a whisper in the ear by a well-meaning friend might start something which spirals out of all control –friends and family will want to be supportive but may be influenced by their own bad experiences of divorce or their feelings towards your ex and may not be able to provide the impartial advice you need.
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4 Do you need to take urgent action?
If you can prove that there is a real risk that your ex is going to move assets out of the country, or destroy evidence, it is possible to obtain freezing orders over their assets or search orders to access and remove documents. Think very carefully before pursuing either of these orders though – this is the nuclear option: they are expensive, they will guarantee you some very nasty litigation, and if it turns out they were unnecessary you could also find yourself at risk of costs orders or other financial penalties.
5 Use the disclosure process
Whether in court or mediation there will be a disclosure process where you exchange financial documents with your ex. Scrutinise these documents closely, looking for inconsistencies or references to accounts you don’t recognise. Your solicitor will do this too, but no-one will have a better idea than you of what looks out of place. If their finances are particularly complex it might be worth involving a forensic accountant. Having reviewed these documents you are entitled to ask further questions or request additional documents, provided you can justify why they are needed and aren’t simply fishing for clues.
6 Consider your ex’s answers properly
Do their explanations make sense? Do their documents back up their story? It can be difficult to admit that your fears were unfounded, particularly if the separation is acrimonious. Ask your lawyers for an impartial assessment of whether your ex’s answers add up. If in reality their explanation is more or less complete then this is your chance to escape the court process and focus on negotiating a settlement rather than being sucked further into expensive and emotionally draining litigation. Remember that some things can upset you without being material to the outcome, so be careful to pick your battles.
7 Do you take matters into your own hands?
The law says married couples are entitled to privacy from each other. You are not permitted to hunt through your ex’s drawers, bags or computers looking for extra information. You are, however, allowed to look at and make copies of documents that have not been treated as private. Confused? The law about this is complex and the penalties for getting it wrong can be severe – talk it through with your lawyer before looking at anything your ex might claim was private. Be wary too of using private investigators. They are not commonly used and you need to be confident they will only use legal means of investigation – they are acting as your agent and you will be held responsible if they are caught breaking the law. You can’t guarantee that any information you find either of these ways will be admitted as evidence by the court.
8 Use the court’s powers, if needed
If there are still gaping holes in your ex’s evidence the court does have the power to order third parties (such as a bank or business partner) to disclose documents, file witness statements or even be added as parties to the proceedings. Just remember, all these options come with some major costs consequences.
9 Keep reviewing the evidence
As you work your way through the various options above it should become increasingly clear whether there are gaping holes in your ex’s story or whether (more or less) everything make sense. It is never too late to try to negotiate a settlement if you feel you have the information to do so. Court trials are horrible and expensive – don’t ever feel railroaded into having one just because you’re so far into the process. Very many cases settle at the door of the court.
10 Let the court decide
If, despite your best efforts, there are still holes in your ex’s story you may have no choice but to let a judge hear the evidence and determine the fair outcome. Remember this is not the movies – your ex is extremely unlikely to crack under cross-examination – but if there are enough inconsistencies the judge may feel able to draw “adverse inferences” and award you a greater share of the family assets.
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Mark Harrop advises on all aspects of family & relationship breakdown at Family Law Partners
