Hiding assets to avoid an ex getting their fair share in a divorce is common amongst the super-rich but it’s not just those with a high net worth who try to find ways of preventing their wealth being shared warn family lawyers, Osbornes Law.
Partners have been known to transfer money to alternative bank accounts, purchase high value items, cash in insurance policies, give assets to friends or family or even set up bank accounts in their children’s names in attempt to reduce the matrimonial pot due to be shared between the divorcing couple.
The problem of hidden assets means the use of private investigators is now the norm in splits where one or both parties are very wealthy.
Osbornes Law family law partner Joanne Wescott says, “The wealthier, higher earning partner in a divorce, often still the husband, potentially has a lot to lose in a divorce and some will try to hide assets so that they will not be taken into account when drawing up the financial settlement between both parties.
“High net worth individuals often own multiple companies, some of them abroad. Their other half may have very little idea about the details of these assets and if they are held offshore, in places such as the British Virgin Islands, it can be difficult to prove their existence.
“I’ve had cases where valuable items of jewellery have gone missing, horses have disappeared and sports cars have been “sold” to a family member. In one case, a simple Google search produced a link to a commercial property owned by the husband that had not been disclosed.
“Whilst those using less elaborate methods to hide wealth are easier to spot, suspicious partners are increasingly turning to private investigators to track down evidence for the existence of undisclosed assets.”
All the assets owned by a couple must be disclosed, as they may fall into the matrimonial pot on divorce unless a prenuptial agreement was drawn up prior to marriage where both partners agreed to ring fence certain assets, such as individual properties or inheritance. Even then, if the couple’s situation has changed a great deal since the original agreement was drawn up, it will have less influence in the divorce courts.
For those who suspect their other half may be attempting to hide their assets, it is necessary to find solid evidence of their existence. That could mean going through bank statements to spot unusual or large transfers of money and asking for disclosures about where money is going if the account is one you are not aware of.
Private investigators can be hired to follow up potential leads and forensic accountants can investigate accounting discrepancies and financial inaccuracies in both business and personal finances.
Joanne says, “People usually have a sense that their soon to be ex is hiding something but proving it can be difficult, particularly when looking at assets abroad. A judge will need evidence, either of the asset itself, or that not everything has been disclosed – something they will take account of even if the assets can’t be found.”
Once a divorce settlement has been agreed, it is very difficult to go back and get it reopened by the courts so it’s important to explore all possible avenues ahead of settlement.
Joanne adds, “For those who marry a far wealthier partner, I would recommend familiarising yourself with the family finances where possible, ask questions, make sure you have a good understanding of where assets are held and try and get what you can held in joint names. Everybody needs a fighting fund so make sure you have enough tucked away, particularly if you think a separation may be on the cards.”