What can I do if I think my spouse is concealing assets?

During divorce proceedings, among the many matters to be resolved before parties can move on with their respective lives, is the financial settlement.  It is at this stage in proceedings that emotions can be at their highest, especially if there is a suspicion or knowledge that the other party is not being honest about the extent of their assets.  Perhaps they have moved money to an offshore bank account, artificially reduced the value of their business, or omitted to mention particular investments.  By making a false declaration of assets, an individual may be in breach of the Fraud Act 2006.  Indeed, Form E, the financial statement which must be completed when seeking a financial order from the Court under the Matrimonial Causes Act 1973 or Civil Partnership Act 2004, makes this very clear, “If you are found to have been deliberately untruthful, criminal proceedings may be brought against you for fraud under the Fraud Act 2006”.

What financial information should be disclosed in a divorce?

When seeking a financial order, both parties are legally bound to make a ‘full and frank’ disclosure of their finances in Form E, which requires full details of:

  • The family home (including the outstanding and market value)
  • Any interest in any other property, land or buildings
  • Contents of all bank accounts
  • Investments (including size of holding and value)
  • Life insurance policies
  • Monies owed to the person (not to a company)
  • Cash sums
  • Personal belongings
  • Business assets and directorships
  • Pension rights and all PPF compensation entitlements
  • Any other assets
  • Any income including from employment, self-employment or partnership, investments, or state benefits

The applicant must also detail their liabilities, including loans, mortgages, and capital gains tax.

As can be seen from this list, the information required to assess a fair financial settlement is both lengthy and detailed.

What can I do if I suspect my ex will or has dispose/d of assets?

If you have reason to believe your ex-partner may be about to dispose of assets to avoid their inclusion in a financial settlement following divorce, a Solicitor can apply for a ‘freezing injunction’ on your behalf.  A freezing order is an interim measure prohibiting the disposal of assets with the aim being to preserve resources until a full judgment can be obtained or enforced.  They can be applied to assets located domestically or worldwide.

The granting of a freezing injunction is, however, always at the discretion of the Court.  Indeed, in the case of Bank Mellat v Nikpour [1985] F.S.R. 87, the Judge described it as the  “one of the law’s two nuclear weapons” (the other being a search order).

When granting a freezing injunction, the Court will consider whether amongst other factors;

  • The application is just and convenient – to ascertain this, the Court will consider if the injustice that would be caused to the respondent outweighs the benefit that would be gained by the applicant – if so, they may refuse the application.
  • The applicant must have an underlying legal or equitable right – as would be the case in a divorce financial settlement.
  • The applicant must have a strong case.
  • The assets must exist.
  • There must be a real risk of dissipation.

The Court will not view actions in themselves as an attempt to conceal assets.  For example, if they have assets held in a complex offshore structure, this in and of itself is not sufficient evidence of dissipation of assets, but this may be taken into account.

Court extends worldwide freezing order

In the case of Akhmedova v Akhmedov [2018] EWFC 23 (Fam), 2018 WL 01912197, an ex-wife (W) sought an extension of a worldwide freezing order which had been granted against her ex-husband (H) in 2016.  H had a complex network of companies in various overseas jurisdictions, including Panama and Liechtenstein.  He also transferred assets including modern art below their real value between overseas corporate entities.  Since the granting of the order, W had launched enforcement litigation against H in several jurisdictions as he had put in place complex arrangements to evade compliance.  Arrangements included a helicopter and private jet in the Isle of Man which were held by three companies.  There was also a motor yacht in Dubai held by a Liechtenstein based company.  In 2018, W applied to the Court to assist her in the enforcement of the original order.  The Court granted the application acknowledging that H had used the two Liechtenstein companies as cyphers designed to evade enforcement.  A financial order was put in place to transfer the yacht into W’s name, and the freezing order was extended to encompass the two Liechtenstein companies.

Final words

The case of Akhmedova v Akhmedov is at the extreme end of concealing assets.  If you suspect your ex-partner is not fully disclosing his or her financial assets in the context of a financial order during or following divorce, it is important to seek advice from a family law Solicitor specialising in financial settlements.  In some cases, a letter outlining your concerns may elicit full disclosure from your ex-partner.  A family lawyer will outline your various options, the relative timescales, chances of success, and estimated costs of uncovering assets and obtaining a freezing injunction.

On a final note, we would advise against taking matters into your own hands when it comes to finding evidence of impropriety.  By accessing email accounts or other records, you may inadvertently place yourself at risk of civil or criminal penalties.  We utilise the services of financial forensics experts who have the skills required to undercover any evidence of wrongdoing in a legally defensible manner.

Rosie Bracher is a specialist family law firm based in Barnstaple.  We have the knowledge and expertise to advise you with any concerns relating to reaching a fair financial settlement.  Please contact our office on 01271 314 904 and arrange to speak to one of our team.