Not disclosing your assets in financial proceedings ….the biggest faux pas!
If you’re going through a divorce and the finances are weighing heavy on your mind (and your wallet), you are probably thinking of any way possible to make sure spouse gets as little of the assets as is possible.
This is a subject which will make solicitors do one of two things if they find out about it. If their client is the one who is not disclosing, they’ll probably sink into their chair and have a small internal cry. If it’s the opponent who’s done it, they’ll be rubbing their hands with glee thinking about that long and pointy-finger-esque letter they get to write .
I’ve seen everything from not disclosing the assets at all, partially disclosing assets, not giving the whole truth about the assets….the list goes on. Whatever way you paint the picture, if you do any of these things, you run the risk of making a judge very angry indeed and having orders made against you.
When you enter into court proceedings regarding the matrimonial finances you are under a duty of full and frank financial disclosure. This duty lasts all the way until the proceedings are concluded. This means you have to disclose ALL relevant financial information in a document called a Form E (the document that you have to fill out right at the beginning of the proceedings which sets out your financial position). By this I mean, you have to disclose EVERYTHING. Yes. EVERYTHING.
Of course, it’s tempting not to do so, especially if you think your spouse has no idea of your true financial position. However, I would wholeheartedly advise against it. Not only are you likely to be in contempt of court (which if found guilty could lead you to be imprisoned or fined or both), but it can leave you open to substantive orders being made against you, including costs order. OUCHIES!
There are occasions where you genuinely forget you have a bank account – usually that one your parents set up for you when you were about 3 years old and which now has the grand sum of 1 penny in it – and if you do that’s fine, as long as you disclose it as soon as you remember and provide documentary evidence in support.
There will also be times where you acquire assets during the course of proceedings, either through inheritance or because you have opened a new bank account or taken out a new credit card. Just because it didn’t go into your Form E at the start, doesn’t mean you don’t need to say anything about it later on. YOU DO!! You need to inform the court and your spouse about any new assets because your duty of full and frank disclosure is ongoing.
If you do decide to run the risk of hiding assets and they are found out at a later date, then your credibility will be shot to pieces and you will likely end up in a worse financial position.
Here’s the top 9 things I’ve heard over the years on (non) disclosure of assets when filling in form E’s:-
1. They don’t know about that bank account so I won’t bother mentioning it.
Don’t do this. Please.
If you do your solicitor will advise you to disclose that particular asset. If you refuse, your solicitor will likely try to persuade you and if you continue to refuse, will have to stop acting for you because your solicitor cannot mislead the court.
Chances are that your spouse will find out about the account anyway and so hiding it won’t help you in the long run.
2. Can’t we just leave that bit out?
3. My mate can write me a letter saying I owe them £X, so that should save me a few bob
Yes, of course liabilities are taken into account when looking at the net assets. However, they need to be legitimate liabilities. You will need to be able to show where the money came in to your account, say what it was for and say how it was used. If your mate has very (un)kindly said they will write you a letter to say they have lent you £10k when they haven’t, you have officially hoped over the line to being fraudulent and dishonest within financial proceedings.
4. I’ll tell her/him if I really need to
Errrr….NO! The time when you “really need to “is in your Form E, so do it then and not later on.
5. Don’t put that in!
Well it depends what you’re asking not to be put in. if you’re asking for an asset to be conveniently missed out or swept under the carpet, your solicitor won’t do that for you. If your solicitor says it needs to go in, it needs to go in! if it’s something you are trying to describe, such as the standard of living you enjoyed during the marriage your solicitor should work with you to prepare something which is in line with your instructions.
6. (S)hes going to hide that from me so I’m going to hide this from him/her
This is not a good excuse, so please don’t. Comments like this make solicitors weep like babies who’ve had a rusk whipped out of their grasp. The best case to run is not a tit-for-tat-he-said-she-said one, but that which sets out an honest position using proper legal arguments. If your spouse wants to hide assets then that is a matter for them and you can raise this at court with the appropriate evidence if needs be
7. Does it really matter that I don’t put it in?
Yes. It really does matter that you don’t put it in.
8. Il just give my job up for now and then get a new one once the proceedings are done
How many times have I heard this little gem?!? Too many. That’s how many. Obviously people genuinely lose their jobs during proceedings. This is an unfortunate fact of life. These people usually quickly try to find another job, because guess what…..stuff like mortgages and bills need to be paid and food needs to go on the table. However there are some who think this is either the best way of getting around paying spousal maintenance or the best way of getting spousal maintenance. Guess what, it’s not. You know why? Because the court can assign you an earning capacity. Yes, that’s right…even if you aren’t earning now, but you were earning before, the court can say that they expect you to earn at a certain level in future and base a spousal maintenance award on this. You will need to be able to show the reasons why you lost your job and the efforts you are making to get yourself re-employed.
9. That account hasn’t got anything in it so I don’t need to put it in.
Actually, yes you do. Whether the account has a zero balance or there are squllions in there, put it in your form E. By putting it in, you are showing that you have an open and honest position and you are not trying to hide anything from your soon to be ex-spouse and/or the court.
It’s likely you have thought about not telling the whole truth about your financial situation. My advice? DON’T DO IT. Just disclose the information. Your solicitor should be able to advise you about the financial position as a whole. If you don’t disclose all of the information then this will likely impact on the advice your solicitor is giving you and if your solicitor doesn’t know everything, they cant advise you properly.