According to a recent study, 3 in 10 adults who have joint finances claim to hide assets from their partner, such as private bank accounts, investments, and other expenses. During divorce, financial issues are often a common point of contention, and you may be surprised to find a few skeletons in your ex’s cupboard. In some cases, separating couples fail to disclose certain assets in an attempt to avoid having them involved in financial settlements. However, non-disclosure can result in fines and penalties and lead to a protracted and expensive court process – some methods even classify as fraud.
No matter how well you think you know your financial situation, it’s in your best interests to take make sure you have as much information as possible about your joint and individual assets before entering into a financial settlement. There are several sneaky ways your ex might try to withhold certain assets, and if you suspect they might not be being completely honest about their financial circumstances it’s worth speaking to your solicitor and double checking the following potential grey areas.
- Delaying payments: If your ex works on commission, or is waiting for payment on a contract, they may try to delay payment to make it seem as if they have less available income. Try to get an accurate statement of earnings from your ex and be sure to stipulate that this should include any forthcoming payments.
- Transferring assets: Moving money from shared or individual accounts to friends, family, or into a new account is another way to make it look like there’s less in the shared pot. This may be done systematically in small, seemingly insignificant amounts, or in a lump sum. Check through bank statements, flag up any unfamiliar transfers or payments, and ask for more information from your bank and your ex.
- Setting up personal insurance policies: Assets may also sometimes be hidden or protected within insurance policies. Check that your ex hasn’t taken out any private or personal policies and look into any unfamiliar insurance payments.
- Claiming fake expenses: For those who are self-employed, independent contractors, or run their own business, expenses can be exaggerated to reduce profit on tax returns. This is not only a case of non-disclosure but is also classed as tax fraud and may result in a heavy fine or worse.
- Overpaying taxes: In some cases it’s possible to make an overpayment on taxes which can then be used towards the following year’s payments, while reducing the amount of available assets during a financial settlement. Request an accurate tax statement from your ex including any overpayments to ensure that they have not been trying to hide money this way.
- Lending or gifting money: Giving money to friends, family, or colleagues to reduce available assets is another form of non-disclosure. Keep track of any transfers going out of your joint and individual bank accounts wherever possible, and ask for clarification on any payments you do not recognise.
- Downplaying the value of assets: When dividing up property, assets and possessions, try to have each item valued independently and as accurately as possible to avoid your ex claiming that something is worth less than it really is.
When entering into separation, the law requires full financial disclosure from both parties, and failure to do so can result in penalties and fines. Furthermore, in financial proceedings, the guilty party may be liable to pay for their ex’s legal fees, or have their financial settlement reduced. If at any time you or your solicitor suspect that your ex is not being completely honest about their income or assets, seek specialist legal advice or consult with a financial advisor to ensure that you are not being short-changed.
In many cases, however, worries about non-disclosure are unfounded – before you go accusing your ex of stashing money away, stop and think about every possible expense you might have accrued over the years. Did your children go to fee paying schools? Have you forgotten to take membership payments or car payments or a last minute holiday into account? Most of us have at least one direct debit or random payment on our bank statement we don’t remember setting up, but most of the time it turns out to be something innocuous.
To speak to an experienced family lawyer at Frances Lindsay & Co about financial settlements, non-disclosure, or anything else to do with divorce and separation, please get in touch with us at www.franceslindsay.co.uk, or call us on 01628 634667.Tags: arbitration, collaborative family law, divorce and separation, divorce solicitor, mediation, non-disclosure, separation