Disclosure is a fundamental requirement to deal with the financial aspects of divorce or separation. Both parties have a duty to be ‘full and frank’ in laying open all aspects of their finances to their spouse and, of course, the Court.
This includes income (earned and investment), bank accounts and credit cards, the marital home and other property (both here and abroad), pensions, mortgages and insurance policies, stocks and shares, and any other capital assets or valuable possessions.
The importance of providing comprehensive financial disclosure on both sides cannot be overstated. Without full disclosure, it is impossible to achieve a fair financial settlement. The law says that where there is fraud or material non-disclosure, the Court reserves the power to make an Order of Agreement at a later date, based on the missing information.
Once you have instructed a trusted divorce lawyer to represent your case, one of the first things he will do is to advise you accordingly, as should your ex-partner’s legal representative, to make sure everyone behaves impeccably, and wholly within the law. George Ide offer a wealth of advice on divorce, see their family law blog for more information.
The trouble with incomplete disclosure…
That said, money is of course one of the most contentious issues in every divorce case. What if you don’t trust your ex to have revealed the complete extent of his/her assets? What if s/he has understated their income in order to reduce the level of child or spousal maintenance payments? What if assets have been hidden to protect them from a ‘greedy ex partner’? It wouldn’t be the first time that a divorcing spouse tried to hide some of their wealth in an effort to ‘limit the damage’.
In a high profile case a few years ago, the founder of IT company AppSense was taken to Court by his former wife who claimed that he had failed to disclose talks about a possible stock market flotation at the time when their financial settlement was being decided.
In a similar case, Mrs Gohil from North London who had accepted a financial settlement from her former spouse, went to Court because he had failed to disclose his true wealth during their divorce; he was later jailed for 10 years for money laundering.
In many marriages, one of the partners assumes the role of financial manager, which can result in the other partner being disadvantages when it comes to knowing about the couple’s assets and overall financial health. The spouse whose job it is/was to look after the family finances may be tempted to use this knowledge to secure a favourable settlement.
Of course, for couples with significant assets, complex financial arrangements or complicated investment structures, it can be very difficult to keep track of what’s what. If you’re worried that your former partner is being economical with the truth and has stashed some of his cash where you can’t find it, you may wish to consult with a forensic accountant.
These are experts that use their formidable accounting knowledge and techniques to investigate legal issues including fraud – not just in divorce cases but in any area of commercial activity where the numbers don’t add up.
For divorcing couples, the main role of a forensic accountant is to locate hidden assets. From reviewing tax returns (direct from HMRC if necessary), checking and analysing financial account statements (eg. savings accounts, money market funds) to closely observing any relevant business transactions, they will examine every detail in an effort to uncover assets or income that have been hidden from view, or suspiciously transferred. Their findings can then be used as evidence should you decide to go to Court.
What should you do?
Divorces can get messy, especially when emotions run high (don’t they always?) and there’s disagreement between you and your former spouses about what is a fair financial settlement. Thankfully, it’s rare for one ex-partner to want to go to extremes and take the risk to defraud the other.
But if you feel that your ex is not being honest, you owe it to yourself to investigate the situation, so that you don’t leave the marriage with less than you deserve. Of course, this applies doubly when there are children involved.
Discuss your suspicions with your solicitor and ask him to apply pressure to achieve full financial disclosure from the other side. If you don’t get a satisfactory outcome, seek advice about involving a forensic accountant and discover the truth of the matter.