As divorce solicitors a big part of our job is to secure the best possible financial settlement for our clients. And to get a legally watertight settlement – one that cannot be challenged in years to come – both parties are under a strict obligation to disclose all their assets. Here we look at the nature of financial disclosure in divorce, and we highlight the danger for anyone who does not paint a complete picture of their financial position.
What Financial Details Do I Have To Disclose When I Divorce?
You and your spouse may be able to reach an agreement about financial matters, for example through mediation and this is what happens in most cases. But you should always take legal advice before agreeing a settlement to ensure that complicated assets like pensions and other investments are dealt with fairly.
If you can’t agree financial arrangements and the court is involved you will need to complete a Form E. It provides a detailed breakdown of your property and debts and includes an estimate of your future living arrangements. You’ll have to gather documentation such as:
- rental or mortgage agreements
- pension documents
- loan agreements
- proof of your salary income, for example P60 or recent pay slips
- details of personal belongings worth more than £500, for example a car or house contents
The Form E is quite clear about the consequences of non-disclosure of assets. It states that:
- you have a duty to the court to give a full, frank and clear disclosure of all your financial and other relevant circumstances
- failure to give full and accurate disclosure may result in any order the court makes being set aside
In extreme cases, if you are found to have been deliberately untruthful, criminal proceedings may be brought against you for fraud under the Fraud Act 2006.
What Can I Do If I Suspect My Spouse Is Hiding Assets?
If you think your spouse is hiding assets to frustrate an accurate assessment of his or her finances, you should seek immediate legal advice. If your spouse tries to put assets out of your reach by moving money abroad, transferring assets to relatives or creating trusts it is important to act quickly to recover and locate the assets before they are placed permanently out of your reach.
There are several well-established legal remedies available if you are worried that your spouse is hiding assets. For example, at Gamlins Solicitors LLP our team of family lawyers can apply for disclosure orders to get access to your spouse’s accounts or we can obtain freezing orders to prevent a spouse selling assets or transferring money from particular accounts.
What Will The Courts Do If My Spouse Hides Assets?
The family courts have a lot of discretion and wide powers to enquire into allegations that a spouse is not being truthful about his or her financial situation in divorce proceedings. Very helpful guidance was given in the case of Moher v Moher in 2019 where a trial judge had found unequivocally that the husband was guilty of significant non-disclosure of his assets. In the circumstances he awarded the wife a financial settlement of £1.4 million.
The husband appealed the decision to the Court of Appeal. He argued that the order was wrong because the trial judge had not based it on any accurate assessment of his (Mr Moher’s) actual wealth.
The Court however found that the trial judge was not obliged to quantify the assets before making an order in a case of non-disclosure like this. While it may be preferable to put an accurate figure on a spouse’s assets if this has not been possible because of that spouse’s lack of co-operation, then it will not always be possible or proportionate to do so. In colourful language the judge stated that it was not the court’s role to act as a ‘cheat’s charter’ or facilitate an outcome that could be more favourable to the non-disclosing spouse than if they had complied with their obligations in the first place.
Comment
There will always be a temptation for people going through divorce to underestimate their wealth – either in the hope of securing a larger means-based settlement or in the hope of reducing the amount of any financial settlement the individual is ordered to pay a financially weaker spouse. And there will always be creative ways of doing this.
As we have seen however the courts have powers to enquire into the nature of disclosure and are unafraid to use them. Note too that the judges who deal with these matters are themselves experienced family lawyers, always alert to the possibility of non-disclosure. Apart from the sanctions that may be imposed if you are discovered to have been untruthful about your financial affairs, a settlement based on erroneous information can always be challenged – way into the future.
Contact Us
If you need any advice on a financial settlement you have reached or on the divorce process generally, please call us on 01492 860420 or Gamlins Solicitors LLP has a network of offices across North Wales, and we can arrange an in-person appointment at the office that is most convenient for you or a remote appointment if you prefer.
