It can be very tempting to try to hide assets from the divorce court, in order to reduce or even extinguish any financial claim that your spouse may make against you. But is it a good idea?
Before it makes a financial remedies order on divorce the court will require both parties to make full disclosure of their means. However, it is possible that one of the parties may fail to disclose all of their assets, and the court may make an order on the basis that they had fewer assets than they really had. The problem, of course, arises if the assets are subsequently discovered, as they are likely to be.
What can happen if undisclosed assets are subsequently discovered was illustrated by a case in 2010, Kingdon v Kingdon. In that case, the parties agreed a financial settlement, and a court order was made in the terms of the agreement. However, the husband had failed to disclose certain shares, which he subsequently sold, and for which he received £1.2 million. Some while later, a ‘third party’ suggested to the wife that the husband had held the shares and received benefit from a sale of them. The wife then applied to have the order set aside on the basis of ‘material non-disclosure’ on the part of the husband. The court found in her favour, but instead of setting the order aside, ordered the husband to pay to the wife a further lump sum of £481,000. The husband appealed, saying that the court should have set the order aside and considered the settlement afresh. The Court of Appeal found that the husband “had been guilty of deliberate, substantial and protracted non-disclosure”, and dismissed his appeal.
In short, the court will take a dim view of any deliberate failure to disclose assets, and is therefore likely to penalise the guilty party, by awarding more to the other party and/or by ordering them to pay the other party’s costs.
So, if you are thinking of trying to reduce your spouse’s claim against you by hiding assets, the advice is simple: don’t.
If you are concerned that that your spouse may be hiding assets, or may have hidden assets when the divorce settlement was finalised, you should seek expert legal advice as soon as possible. Family Law Café can help you find this. To contact us click the Contact link above and fill in the form, or call us on 020 3904 0506.
Image: Safe, by Rob Pongsajapan, licensed under CC BY 2.0.