What is your spouse hiding? Financial disclosure of matrimonial assets during divorce
When you decide to separate it can be an intensely emotional time. Decisions on how to split any matrimonial assets can be fraught for a number of reasons.
It is important to have a full understanding of all of the matrimonial assets in order to decide how these will be divided. The main principle followed by a court when dividing assets will be what is considered to be fair for both parties. This does not necessarily mean equitable though an equal division of assets is the starting point. There is a large amount of discretion in what the Court can decide, potentially making this an unsettling time.
Whilst in many cases both parties are happy to be open about their finances, sometimes one party can be tempted to hide or even dispose of assets during the separation process.
Hiding assets - what is it, and what are the penalties?
Hiding or disposing of assets can happen in a number of ways. One party might attempt to transfer assets to a third party, or spend or transfer any equity in the matrimonial home. The Court has powers to order full disclosure of assets and can penalise the person who has hidden any assets, either by requiring them to contribute to court costs, or by awarding them a less favourable settlement. The Court also has discretion to use injunctive remedies to prevent assets being transferred, or retrieve them in the event of a transfer.
How can I make sure I know what all the matrimonial assets are?
If you are concerned your ex-partner might be less than frank about the extent of matrimonial assets, or might try to dispose of any, there are steps you can take:
- Firstly, be aware you should act swiftly and get legal advice as soon as possible. In particular, you need to know what you are legally allowed to do in order to obtain information about any assets you suspect might be hidden or transferred. For example, you could be breaking the law if you open your ex-partner’s post, or take copies of their bank statements.
- If assets are about to be disposed of without your agreement for example a property, you can apply for a section 37 order under the Matrimonial Causes act to prevent a sale from occurring, or to get the asset transferred back if a sale has already happened.
- Freezing orders can also be used, and will apply to a wider range of assets such as pensions and assets held abroad.
- In rare cases a search order can be used to get information about assets you suspect have been hidden, but be aware that these can be difficult and costly to obtain.
Other steps you can take
Property
If your home is in the sole name of your ex-partner, you can register a notice of rights of occupation in order to protect your right to live there. This might be a prudent course of action if you are concerned your ex-partner might sell or mortgage the home without you knowing.
Credit Cards and Joint Accounts
If you have concerns that your ex-partner could run up payments or overdrafts on any joint accounts or credit cards, you can speak to your bank to get limits put on these, but again you need to be careful and take legal advice. An interim course of action might be to monitor what your ex-partner is spending on any joint accounts or credit cards and be ready to take action if there is a significant increase in spending.
As always, if you are concerned about the disclosure of matrimonial assets, the best course of action is to seek good quality legal advice to guide you through the process.
