When going through a divorce, both parties need to fully disclose all assets as part of the process of obtaining a financial order. Failure to do so can result in penalties, including fines and the risk of imprisonment for contempt of court. If the court believes that assets have been hidden in a divorce case, it can take the value of the undisclosed assets into account when making an order.
If you believe that your spouse is hiding assets, you should speak to an experienced divorce solicitor. We can take action to obtain disclosure and represent you in seeking a fair financial settlement on divorce.
How Do I Get a Financial Order on Divorce?
It is essential to ask the courts for a financial order if you are obtaining a divorce. The reason for this is that financial obligations do not end with divorce alone. Without a financial order, your former partner could make a claim against you in the future, including if you were to become wealthier. A final order from the courts will separate your finances and, unless you are ordered to pay spousal maintenance, will usually end your financial obligations to your spouse.
How are Assets Disclosed on Divorce?
The court Form E is usually used for asset disclosure on divorce. It is a comprehensive form and you and your spouse will need to fill in details of all of your assets, income and liabilities as well as information about your personal situation, such as your financial needs, those of your children and any costs you may incur in respect of your change in circumstances.
The form is lengthy and a family law solicitor will be able to assist you in completing it if you need help or if you have questions. If you would like to talk to someone about filling in Form E, call us today, and we will be happy to assist.
How are Assets Hidden on Divorce?
There are many ways in which individuals may try to hide assets on divorce, including transferring property, valuable items or money to friends or family members, exaggerating debts, delaying a bonus payment, undervaluing a business, putting assets into trust and selling assets to a family member or friend at an undervalued price.
How Do You Find Hidden Assets on Divorce?
An experienced family law solicitor will use a range of methods to try and identify and locate hidden assets, including looking at information in the public domain. This can include the following records:
- Land Registry records of property transactions
- Companies House records, including company directorships and company accounts
- Shareholdings
- Vehicle ownership
- Credit reports
Professional asset-tracing services can also be used to search records, identify assets owned by businesses and uncover the use of different names and business names.
Where necessary, a solicitor can apply to the court for the following orders:
- An order requiring a party to provide details of assets.
- An order for non-party disclosure will authorise your solicitor to obtain information from third parties such as HM Revenue & Customs, banks, accountants, employers and new partners.
- An avoidance of disposition order prevents the sale or transfer of an asset or allowing a transaction to be set aside.
- A search order allows someone’s home, workplace or business premises to be searched for assets or evidence of assets.
- A freezing order, stopping someone from moving assets.
- An order allowing the value of hidden assets to be added to the value of the matrimonial assets. This means that when a financial order is made, the hidden assets will form part of the sum awarded to the individual who has hidden them. The other party will receive assets from those available.
What are the Penalties for Hiding Assets in Divorce?
The penalties for hiding assets during divorce can be severe. If the court finds someone in contempt of court, they can be fined and, in extreme cases, imprisoned.
The court can make a less favourable financial order, and the individual at fault could be required to pay the other party’s legal costs, particularly if the hidden assets have made the case longer and delays have been caused.
If the judge believes that one party is hiding assets, they are likely to take these into account when deciding how much that party should have in a divorce. The party at fault will be awarded hidden assets, while the other party will have their payment from disclosed assets. This could mean that the party hiding assets has a less favourable settlement than they might otherwise have had.
When it comes to light later on, after an order has been made, that one party did not disclose assets, the other party can apply to the court to have their case reopened and a new financial order made, taking into account the hidden assets.
Divorce Cases with Undisclosed Assets
The case of Young v Young [2013] involved the divorce of a property developer, Scot Young, and his wife, Michelle. The couple enjoyed an extravagant lifestyle during their marriage, but on divorce, Scot Young refused to disclose his assets and claimed to have debts of £28 million.
He was jailed for six months for failing to reveal his assets.
The court concluded that he had hidden £45 million. Of that, £5 million was set aside to pay his debts and Michelle Young was awarded half of the remainder, some £20 million.
In the case of EK v DK [2023], the husband said he had no liquid assets and did not intend to buy a property. He was in the process of purchasing a property, which would make him £3.5-£6.5 million in profit. The court set aside the original financial order based on his dishonesty.
Contact Our Divorce Solicitors
If you are facing a divorce and you have concerns that your spouse may be hiding assets, contact us today, and we will take steps to protect your interests. We have extensive experience in dealing with financial matters in divorce and will deal robustly with any attempt to avoid disclosure.
For more information, see our family law page.
To speak to one of our expert divorce solicitors, ring us on 0330 173 3980, email us at info@witansolicitors.co.uk or fill in our contact form and we will talk through your situation with you and discuss how we can assist.
