Protecting your finances on divorce or separation

Written by Susan Davies, legal director, head of divorce & finance at Pickering Solicitors

If you are going through a divorce or separation, we recommend that you keep a close eye on your finances. You may need to take swift action to ensure that your position is protected, particularly if the breakup is an acrimonious one.

When divorcing you will need to reach agreement with your ex on financial arrangements and division of assets. If you can't reach an agreement between yourselves then the courts will become involved.

The process of reaching a financial settlement requires both parties to be open and honest about the finances by providing full and frank financial disclosure of assets.

It is often the case that one party routinely manages the finances within a relationship. If your partner has always managed the money, you might not even know exactly what marital assets you have. It is particularly important that you pay attention to finances at this point and take steps to ascertain the exact position.

Sometimes a party will try to disguise the true financial position to gain an advantage. They might try to conceal assets until the financial settlement is finalised.

How do people hide assets when divorcing?

People can be surprisingly creative when it comes to making assets disappear. In some cases a manipulative ex will rely on the fact that you've never really paid attention to the finances in order to divert them for their own gain. These are just some of the methods people have used:

• denying that an asset ever existed or in the case of an investment claiming that it was ‘cashed in years ago.’
• giving money or assets to a friend or relative to hold onto for them until the divorce is finalised.
• asking an employer to delay paying out a bonus or Commission.
• working for ‘cash in hand’ and not declaring all income to HMRC
• hiding money in a business by manipulating the accounts or profitability
• investing in cryptocurrency
• holding assets overseas
• setting up trusts

How can I tell if my ex may be hiding assets?

Both you and your ex will be required to complete a financial disclosure form which gives detail regarding your bank accounts, investments, pensions, savings mortgages, salaries etc. When you receive this form completed by your ex, you and your solicitor should scrutinise it carefully to establish whether any details may be missing. Your solicitor should be able to help you evaluate the information and spot anything which does not add up.

Some of the warning signs to look out for are:

• your ex changes the passwords to accounts or investment apps or platforms.
• you are denied access to joint accounts.
• property may have been transferred into the names of other family members.
• your ex has made investments into cryptocurrencies or online trading platforms to which you don't have access.
• your ex stops receiving mail at your shared address, which might indicate that documents are being routed to a different address.
• you know that they gamble, but they have not disclosed online accounts.
• your ex abruptly has an unexpected change of heart and decides that you need to ‘try again’ with the marriage. This can be a stalling technique to allow them more time to put their finances in the order they would like.

What can I do if I believe my ex is hiding assets?

The first thing you should do is to tell your solicitor. Don't try to take the law into your own hands by hacking into the computer or opening his or her mail.

An experienced divorce solicitor will have seen this situation in the past and know exactly what action to take. Depending on the circumstances there are a number of things which can be done.

It is possible to apply for a third-party disclosure order which would enable your solicitor to obtain documents from banks and other organisations which may hold assets. They can also apply to approach HMRC.

Another route is to appoint a forensic accountant to scrutinise your ex’s financial statements and question any inconsistencies.

With regards to property the solicitor can help you make an application for a notice to be placed on the former matrimonial home or lodge a unilateral notice or restriction on any properties owned at The Land Registry.

What if my ex has hidden our assets?

If your ex is found to have hidden assets or to have failed to disclose full financial information, the court can order him or her to make a Full disclosure and may order that your ex pays your legal costs.

Finally it is a criminal offence to hide assets in a divorce in order to deprive the other party of their share, so ultimately it may be punishable by imprisonment.

Pickerings offer a free 30 minutes first consultation at which you can discuss any of the issues above. Rather than worry about things, take some advice from our experienced team. Contact sdavies@pickerings-solicitors.com or call 01827 317070.