Hidden Assets and Divorce: Three Key Questions

Following on from our previous blogs on red flags and what we see in casework, in this article Raymond Davidson answers three key questions often asked when considering hidden assets in divorce cases.

What steps can be taken to find hidden assets?

Any assets transferred within three years of a divorce can be set aside as an improper transaction. Note the following steps:

• If you suspect your spouse is hiding assets, tell your solicitor immediately.
• Instruct a reputable forensic accountant with experience of investigating hidden assets, particularly in relation to cryptocurrencies.
• Apply to the Court for an order for disclosure, enabling a solicitor to obtain documents from banks and organisations such as HMRC.
• Search & Seizure orders are helpful if you suspect a partner may try to move or destroy records of assets. However, there needs to be compelling evidence and a need to prove that not having access to these documents would cause irreparable damage.
• Apply for a freezing order to stop an individual from disposing of or dissolving assets.
• Ask for an ‘Avoidance of disposition’ order ( e.g. to prevent the transfer of savings to and disposal of by a third party) which, if granted, means your divorce will continue as though the transfer never happened.
• Alternatively, seek an add-back for ‘wanton or reckless’ spending.

If the divorce has been finalised and you discover that your spouse was hiding assets, then the case can be reopened.

Should divorcing couples conduct their own investigations?

You must not try to investigate the situation yourself by opening your ex’s mail or hacking into their computer. To do so would be illegal and you could find yourself subject to civil and criminal penalties. Do not go searching through your ex’s drawers and filing cabinets.

How do you rebut an allegation of hidden assets?

This is a challenge both in criminal and civil matters because what you are trying to prove is a negative i.e. that you haven’t deliberately understated your assets or overstated your liabilities.

When dealing with such matters, the basis for the allegation can be challenged. Firstly, establish what the specific allegation is and what the evidence for this is. It isn’t sufficient for someone to say that they suspect their spouse is hiding assets. Documentary evidence should be obtained, where possible, to rebut the allegation. Consider the spouse’s lifestyle and behaviour, too, i.e. are there any red flags? Is there any activity indicative of hiding assets?

Should you need any assistance regarding potential hidden assets or other aspects of matrimonial finance, please email Raymond Davidson at raymond.davidson@davidsonsforensic.co.uk or call him on 07719192257.