What to do if you feel that your Spouse has hidden their assets?
By Rakhi Singal
Rakhi Singal is Founder, Director and Head of Family Law at RVS Solicitors. Studying at Bournemouth University and BPP Law School, Rakhi quickly gained a profile in the industry for her work. After creating and successfully managing the Family Law & Civil Litigation department at a leading Legal 500 law firm in London, a role that she was headhunted for, she got the idea to create a law firm in her own image. RVS Solicitors was created and has subsequently helped hundreds to achieve their legal goals, start new futures and obtain justice. A highly regarded family lawyer in the UK, Rakhi gained industry recognition for her relentless attitude, negotiation skills and her ability to always stay calm under pressure and provides a high level of expertise, knowledge and service to our clients every day.
Divorce or the dissolution of a civil partnership can be an extremely complicated process to endure and at times, can be an even more burdensome and emotionally negative experience if the decision to separate was not amicable.
Some spouses can become suspicious of their spouse in relation to the spouse’s possible attempts to hide their assets. This issue usually arises during divorce or dissolution of a civil partnership when both parties are required to disclose all assets in their name; this process is called financial disclosure. The assets can include savings, investments, property, stocks and anything else that may be of value. The purpose of financial disclosure is to ensure that a fair and reasonable settlement is reached however, this cannot be done if one party decides to hide their assets as this prevents the courts from all assets into consideration.
How can I prove that assets have been hidden?
In certain circumstances, one spouse can become increasingly suspicious and attempt to obtain information and documents relating to their spouse in order to ascertain the extent of their spouse’s assets. However, this is not wise as this is deemed illegal; a spouse who obtains information and/or documents relating to their partner without the consent of that individual, could face serious legal consequences including a fine or imprisonment.
This principle was enforced by the case of Imerman v Imerman [2009] EWHC 3486 (Fam); the Court of Appeal stated that the right to confidentiality applies between husband and wife, and as such obtaining information/documents without the consent of the other spouse is a violation of their right to privacy. In addition to this and rightly so, any information and/or documents copied, retained or passed to a third party without consent cannot be relied upon during proceedings. It should be noted that documents are considered to be confidential and private even if they are placed in an open space without a password or lock; it is sufficient to have obtained the documents without consent for it be deemed as a violation of privacy.
If you are worried that you may have had sight of certain financial documents that prove your spouse has hidden assets, please kindly contact us and we can discuss your options in further detail.
It is advisable to approach such a concern legally by utilising the options made available by legislation. The courts will try their utmost best to ensure that both parties provide one another with full and accurate financial disclosures. A ruling made by the Supreme Court in 2015 further reinforces the court’s view on cases where a spouse has hidden financial assets. The Supreme Court provided two claimants with the right to fresh hearings after both stated that their former spouses had not disclosed all of their assets which had consequently meant that both women had not received a fair settlement. This was a landmark ruling made in favour of those at a financial disadvantage due to their former spouse’s deceitful actions in hiding assets.
What are my options if my spouse has their hidden assets?
The law recognises that such circumstances can easily come forth and as such has provided an array of options to firstly, prevent such situations from arising and secondly, to help alleviate the potential impact on a spouse when assets have been successfully hidden.
The first option is to make an application for an order under section 37 of the Matrimonial Causes Act 1973; an order under this section can assist with two outcomes. Firstly, the order can prevent a spouse from disposing of their assets if they are in the process of finalising the transaction, transfer or sale of the assets. This is an extremely effective method as it prevents the spouse from taking financial advantage of another and therefore assists in ensuring that full financial disclosure is provided.
An order under section 37 of the Matrimonial Causes Act 1973 can also require a spouse who has disposed of assets to transfer the assets back. With both of the above options under section 37, it must be shown that the disposition of the asset was made in order to prevent the other spouse from receiving a full and fair financial settlement.
In the case of AC v DC (No 1) [2012] EWHC 2032 (Fam), Lord Mostyn J stated that the spouse wishing to rely on section 37 of the Matrimonial Causes Act 1973 must establish that:
- the other spouse disposed of the asset with the intention of defeating a spouse’s claim for financial settlement;
- the disposition of the asset did defeat the other spouse’s claim for a financial settlement, either by preventing a settlement or by reducing the settlement amount; and
- as a result, the court should exercise its discretion and require the transfer of the disposed asset.
It is clear that the law has attempted to assist in providing a fair and balanced financial settlement by providing spouses with the equitable right to request the cancellation of a sale and/or transfer of an asset.
The law in this area is not always straightforward and clear, legal advice must be sought on the outset to ensure that a spouse is awarded a fair financial settlement. Contact us and we can assess your situation to determine whether you are eligible to make an application under section 37 of the Matrimonial Causes Act 1973.
A further option is to make an application to the court for a freezing order, formally known as a Mareva injunction. The order is an injunction made by the court which stops a spouse from disposing or actively handling assets in cases where the spouse would have ensured that the assets are not included in financial disclosure and consequently, would also not have been considered during the financial settlement. A freezing order is effective as it can be made without the consent of the other spouse who is suspected of hiding assets and as such it can be ordered without their knowledge. A freezing order can also prevent the disposition of assets abroad, thus providing a wider safety net for those concerned that full financial disclosure was not provided.
The third option is a search order, previously referred to as Anton Pillar order, which allows a search of the suspected spouse’s home and further affords the right to seize documents relating to assets and the financial proceedings in the divorce procedure. This is an expensive process and should only be considered in cases where high-value assets have been hidden resulting in a serious and dishonest financial non-disclosure.
Contact us if you are worried that your spouse may be attempting to hide their assets. Our team of experts will be able to guide you through the above options in detail and further advise you on the strict guidelines that must be complied with when dealing with hidden assets.
