Copyright Moore Barlow LLP (Moore Blatch and Barlow Robbins merged May 2020)

What if my partner tries to hide money in our divorce proceedings?

It is not uncommon for spouses to be worried that their ex will try to hide assets, or lie about the true extent of their income or investments, when it comes to a financial settlement alongside divorce proceedings. This can particularly be a worry for, typically, a wife who has been a stay-at home mum or part-time worker who has left the management of the family finances to her husband. She feels in the dark and vulnerable as she does not know, or not the full extent of, what they have got as a family and/or whether there are any liabilities.

There is an obligation in family law cases dealing with resolving divorcing couples’ financial claims of full and frank financial disclosure. This is an on-going duty so if you, for example, receive a pay rise or an inheritance etc. as the proceedings go along this must be made known to your spouse and his/her legal advisers.

A recent case called Moher v Moher [2019] EWCA Civ 1482 emphasises that the court does not tolerate a failure to disclose fully and frankly your financial circumstances upon divorce. In this case the husband failed to provide full and frank financial disclosure and was penalised by having to pay just over £52,000 towards the wife’s costs. The court found that when it cannot know with certainty what all of the assets are due to non-disclosure it can, if it deems it appropriate, infer that there are sufficient resources to make an award anyway. In this case the wife was awarded £1.4 million. The husband had suggested that the wife should receive £960,000 whilst the wife sought a lump sum of £1.5 million. The wife’s case was that “what the husband disclosed and the values disclosed are likely to represent a significant undervalue of the true extent of the assets”.

The case is a reminder that failure to be honest and open about your financial resources when getting divorced has serious consequences. Honesty is definitely the best policy.

Where there is a mutual trust between the couple it also means it is much more likely that they will be able to resolve things in a much more amicable and dignified fashion, as opposed to expensive, stressful and risky court proceedings. More constructive and amicable options for resolving matters are mediation or the collaborative process which I always encourage my clients to consider. I am a trained family mediator and collaborative lawyer so these outside of court options are always something I discuss with my clients at the outset. They provide a forum for frank discussions in a supported environment and hopefully ensure that future relationships can be preserved, which is especially important if there are children.

For more information please contact Sarah French.


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