Hiding assets in Divorce not a cunning plan
Both parties will be required to give full and frank disclosure of their financial position if there is a financial settlement during divorce. It can be inconvenient, expensive and embarrassing for those involved, but financial disclosure is essential for legal advisers and courts to properly understand what the parties’ respective positions are, and to find a fair way of dividing the marital assets.
The temptation to hide away some assets must be very strong when a wealthy divorcee realises that they are going to have to give significant amounts to their ex.
In a recent case, KG v LG (No 2) [2015] EWFC 64, a wife applied to appeal against a consent order on the grounds that her ex-husband had not properly disclosed two Trust which he was the principal beneficiary of. Even though the parties had decided not to exchange full financial information in exchanging Forms E (the normal and very rigorous way), in the appeal the Judge ruled that the husband had nevertheless been required to provide sufficient disclosure to his wife such that she had a proper picture of his financial resources. The husband had not done so, and this had a material impact on negotiations and the order, so the consent order was set aside. The husband now faces a hefty bill for legal costs, and he will have to renegotiate the entire settlement with his ex-wife. It would have been much better to give full disclosure earlier.
The law of non-disclosure is currently in flux. The Supreme Court will give its decision soon in two cases heard in June where wives allege that their ex-husbands concealed wealth, depriving them of a proper settlement on divorce. In Sharland and Gohil the Supreme Court will consider when it should be permissible to reopen proceedings when it later emerges that there has been material non-disclosure or fraud.
The Supreme Court will likely be keen to fight back against the perception that family courts are a soft touch and this may make it easier for a wronged spouse to re-open proceedings. In the past this has not always been easy; in one of the cases before the Supreme Court, the Court of Appeal had previously labelled the husband “an out and out rogue involved in financial criminality on an eye-watering scale” but ruled in his favour anyway. It is no wonder that the wife appealed!
If you suspect that your ex misled you about their financial position when you were coming to a financial settlement after divorce, you should take advice from a specialist family lawyer promptly. Delaying too long might mean that you are not entitled to have the order overturned, even if you can prove that your ex was hiding assets.