What Should You Do If You Suspect Your Ex Is Hiding Assets?
November 5th, 2018
Often when marriages fall apart, one of the spouses may lie about or hide their assets in an attempt to keep more for themselves during the equalization process, particularly where there is high-net worth, a business or practice, or other complex dynamic involved.
Following the breakdown of a relationship, each spouse is legally obligated to provide the other spouse with full and frank financial disclosure. This is required in order to fairly determine matters such as equalization of property, spousal support ,and child support.
In most cases, both spouses will willingly participate in this process with full honesty. However, in some cases, spouses may believe that they can hide assets or move them around so that their spouse receives less than they are entitled to.
Valuation of Assets
When a marriage ends, each spouse is entitled to 50% of the value of assets accumulated by the parties during the marriage.
This can become complicated where there is a business or a practice (legal, dental, medical, etc.) involved, or where there are significant assets spread across real estate, investments, stock options, bonuses, and other sources of income. This is also further complicated by business expenses and other debts.
Where there are significant and complex assets involved, it may be easier for a spouse to hide or shelter their income.
How Can Assets Be Hidden?
With creative financial planning, it can be easy for a spouse to hide assets, or make it appear as though they have less money than they actually do.
Methods that spouses have used to hide or covertly move assets include:
- Generating fake business or other expenses;
- Making large purchases;
- Lending money to others;
- Secretly withdrawing money from RRSP’s and other accounts;
- Transferring ownership or interest in a company to company partners;
- Not disclosing assets held offshore;
- Not fully disclosing all business assets.
Red Flags to Watch Out For
There are a number of red flags you should be aware of leading up to or following your separation which may indicate that your spouse is hiding assets. These include your spouse:
- Making a sudden and unusually expensive purchase (car, boat, art, etc.);
- Making sudden payments to family members, friends, or business partners to settle “debt”;
- Giving large gifts of money or other assets to family members, friends, or business partners;
- Reporting a dramatic decrease in business earnings;
- Reporting a dramatic loss in the stock market or other investments;
- Reporting a delay in receiving promised raises or employment bonuses;
- Opening bank accounts in your children’s names;
- Suddenly gambling or spending money in unusual circumstances;
- Transferring assets from a joint account to a business account or separate individual account.
You may be more at risk for a spouse hiding assets where:
- Your spouse was the one responsible for paying all bills, making investment decisions, and otherwise being in charge of family finances;
- Your spouse has access to all online password and other banking information;
- Your spouse has a private P.O box, mail is sent to their office, or mail is sent elsewhere other than the home you shared;
- Your spouse is secretive about financial affairs or is unwilling to share information.
Finding Hidden Assets
Locating hidden assets can be challenging and can include things such as surveillance of a spouse, through searches of public records, forensic accounting, and other methods.
Public searches that should be undertaken include general internet searches, searches of land registry databases, corporate searches, and Personal Property Security Registration (PPSR) searches.
Documents that should be requested and reviewed include tax returns, employment records, property tax records, bank account statements, credit card statements, investment statements, as well as retirement plan and pension plan statements.
If you suspect your former spouse is hiding assets, you should contact a family lawyer with significant experience handling such matters as soon as possible. The faster you retain assistance, the quicker you can stop your spouse from moving money and other assets around, and the better you can protect yourself and your children.
How Can We Help?
At Financial Litigation, we focus specifically on the financial aspects of family law. We have experience handling the complicated elements of high-income families, including valuing corporate ownership, offshore assets, and real property. With our niche skill set, our clients can be confident that their financial well-being is protected.
To protect yourself and your assets, choose a lawyer that focuses exclusively on assisting high-income and other high net worth clients to plan for their new future post-separation or post-divorce. To schedule a consultation with our knowledgeable team, contact us online or call 416-769-4107 x1.