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How to find hidden assets during a divorce

Our People - Loretta Orsi-Barzanti
4 April, 2024

Divorce is a complex and emotionally charged process. When faced with the additional stress of suspecting your spouse might be hiding assets, it’s important to know you have options. In the UK, both parties have a right to full and frank disclosure of all financial holdings during divorce proceedings to ensure a fair financial order

Can you hide assets in a divorce in the UK?

Absolutely not. UK law prioritises fairness in financial settlements during divorce. This means both spouses must submit a detailed financial disclosure document called a Form E. This form requires complete honesty about all income, assets, and debts. Sophisticated methods exist to detect hidden assets, and attempting to conceal them can backfire significantly.

What is the legal obligation regarding assets in the UK?

The concept of “full and frank disclosure” is a cornerstone of UK divorce proceedings. This legal obligation compels both spouses to submit a Form E, a detailed document outlining all financial holdings. This includes income sources, assets (property, investments, etc.), and any debts. Hiding assets is not only unethical but also comes with serious legal repercussions. These can range from financial penalties and court sanctions to a less favourable financial settlement in the divorce and delays in finalising the process.

Where are common places to look for hidden assets?

While it’s impossible to detail every method someone might use to conceal assets, here are some red flags to be aware of:

  • Money on the move: Transfers of large sums to different accounts or unexplained withdrawals could indicate hidden assets.
  • Undervaluing assets: Businesses or property might be deliberately undervalued to minimise their worth in the settlement.
  • Fictitious debts: Fake invoices or loans can be created to make it seem like there are fewer assets available.
  • Unexplained accounts: Investments in undisclosed accounts, cryptocurrency, or offshore holdings can be difficult to track.

How can you discover hidden assets during a divorce?

If you suspect hidden assets exist, here are some steps you can take:

  • Request detailed financial disclosure: Gather bank statements, tax returns, investment records, and property deeds through a Form E.
  • Consider a forensic accountant: These professionals specialise in tracing hidden assets and uncovering financial discrepancies.
  • Review credit reports: They might reveal hidden loans, lines of credit, or undisclosed accounts.
  • Look for inconsistencies: Unexplained changes in spending habits or sudden drops in income can be cause for concern.

You can also explore legal tools through your divorce solicitor including:

  • Search of the proprietorship register: You can also request a search of the proprietorship register under the name of your ex-partner. This can reveal any properties they own but haven’t disclosed. However, you’ll need either a court order or your ex-partner’s consent to conduct this search.
  • Third-party disclosure orders: In court proceedings, you can obtain orders compelling third parties like banks or financial institutions to disclose information about your ex’s financial holdings. While helpful, securing these orders requires evidence to support your suspicions of hidden assets.
  • Search and seizure orders: These are extraordinary measures used in rare circumstances. With strong evidence and court approval, a search and seizure order allows searching your ex’s property for hidden assets.

What if you suspect your ex is hiding assets?

Avoid confronting your ex directly or conducting your own investigation, as this could have legal repercussions. Instead, seek professional guidance and consult with a qualified divorce solicitor. They can advise you on the legal process to obtain full financial disclosure and potentially utilise legal tools to uncover hidden assets. This may involve applying for non-party disclosure orders or, in rare cases, search and seizure orders.

Under Section 37 of the Matrimonial Causes Act, a transfer of property can be set aside if the court is satisfied that it was done to frustrate a matrimonial claim or hide the asset from being included within the matrimonial pot. This means that even if your ex attempts to hide assets by transferring them, the court can reverse the transfer under certain circumstances.

What are the penalties for hiding assets during divorce proceedings?

In England and Wales, hiding assets during a divorce is considered a serious offence. There isn’t a single fixed penalty, but the court has a number of options to deal with a spouse who tries to conceal assets:

  • Financial penalties: The court can order the spouse who hid assets to pay the legal costs of both parties. This can be a significant financial burden, as divorce proceedings can be expensive.
  • Contempt of court: Intentionally failing to disclose assets can be seen as contempt of court, potentially leading to fines or even imprisonment in extreme cases.
  • Worse financial settlement: If the court discovers hidden assets after a financial settlement has already been made, the innocent spouse can apply to have the order changed to reflect the true value of the marital assets.
  • Difficulties and delays: Hiding assets will almost certainly complicate and delay the divorce process. Reaching a financial settlement becomes more challenging, adding stress and extending the overall time to finalise the divorce.

Contact a specialist divorce lawyer

If you are facing a divorce and have any concerns that your ex may be hiding assets, please feel free to contact GN Law on 020 8492 2290 for a consultation. Our experienced divorce solicitors can guide you through the legal process and help you get a fair financial settlement.

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