It’s a sad fact that once a relationship ends, it’s quite common for one party to hide or misstate their true financial details so that certain assets don’t become part of a property settlement made to finalise the split.
But what the party who does this sometimes fails to realise, or chooses to ignore, is that as soon as a separating couple begins to discuss a property settlement, each party has an ongoing duty of disclosure. This means that they must provide each other with all the information and documents relevant to their case, and this duty continues until the settlement is reached.
Of course, if you become aware an ex-partner is hiding or misrepresenting details about their finances you should immediately seek legal advice to see what options are open to you to gather the information you need to negotiate a fair and equitable property settlement.
What can you do when a partner hides money and assets?
Once discussions about a property settlement commence, each party to the settlement may complete a Financial Statement that details all of their assets, liabilities and financial resources, whether held solely, jointly with any other person, a third party (such as a new partner), a company or a trust.
This financial statement is a prescribed family court form and acts as an affidavit if filed in Court, meaning it must be sworn under oath or affirmed before a prescribed witness. If a party provides false information, even by mistake, the credibility of that party’s case may be affected and penalties for swearing false evidence may also apply.
Under the duty to disclose, you can request documents from your ex-partner provided they are relevant to the property settlement. These might include tax returns; bank statements; pay slips; superannuation statements; Centrelink documents; Child Support Assessments; Certificates of Title; mortgages; land appraisals or valuations; leases; loan applications or agreements; insurance policies; share certificates; trust deeds; and business, partnership or company documents.
It should be noted that the duty also includes details of any sale or gifting of any assets made in the year immediately prior to separation, or since separation.
What to do next if you believe your former partner is hiding financial details
If your ex-partner refuses to provide full disclosure, you have few options other than to commence proceedings. It’s highly advisable to seek legal advice to assist with identifying whether the disclosure you have obtained (if any) has inaccuracies, inconsistencies or items that require further examination.. Your ex-partner’s financial statement may highlight discrepancies and it is important to remember that parties may be cross-examined on their financial statement during court proceedings.
If you remain suspicious or concerned that full disclosure has not been provided the following can be implemented:
- Seek orders from the Court that specific documents be provided; and/or
- Subpoena the party or a 3rd party, i.e. banks, employers, financial advisers and any other relevant organisation that may be in possession of financial records relating to the property settlement, to provide the document to the Court.
If certain documents have already been requested for disclosure but the other side has refused to provide the documents, the non-disclosing party may risk an order by the Court to pay the costs associated with obtaining the order for further disclosure.
Further, a Court may not allow for a document to be relied on or used if the document has not been previously disclosed. If a Court finds the non-disclosing party has assets that have not been disclosed, the Court has the discretion to be more generous to the other party in the property settlement.
Finally, it’s possible to serve an ex-partner with a Notice to Admit Facts. This notice would ask direct questions on issues directly relevant to the property settlement. The responses to these questions can be subject to cross examination in court, and any inconsistency between the answers in writing and those given in court can result in an adverse outcome for the non-disclosing party.
Failure by one party to comply with any of the steps set out above can result in a court order that prevents the person from relying on the document/s at a later date; or contempt of court charges and court costs; or dismissal of the case.
One course of action often employed by people whose property settlement involves assets of substantial value is to employ the services of a forensic accountant. Forensic Accountants are specialists in examining financial records for evidence of assets hidden or sold to avoid then becoming part of a property settlement. This is generally a costly option in order to discover whether a former partner has been hiding assets and one that should only be undertaken after seeking legal advice as to whether you have reasonable grounds for your belief that your ex has concealed or understated assets.
The value of expert legal advice
One of the first casualties of a relationship break-down is trust between the former partners. This situation is exacerbated where one party conceals their true worth so as to prevent their ex accessing an equitable share of the assets in a property settlement.
Unfortunately these situations can be fraught with conflict, deceit, and a ‘he-said, she-said’ battle. Availing yourself of expert legal advice to help guide you through some of the options outlined in this article is a wise thing to do.
Family law professionals Arbon Legal Group have proven experience and expertise in matters such as this. We’ll provide relevant, effective and confidential advice to assist you towards the best property settlement for you, thereby helping you move on with your life. Contact us today for a free no-obligation initial consultation on (07) 5562 0444.