Hiding and undervaluing assets in divorce


 

Hiding and undervaluing assets in divorce

Have a look out for

  • International business or personal links
  • A structure of business interests and joint ventures, registered in offshore jurisdictions.
  • Tax or financial planning arrangements

Cash’ bit coin, well cloaked businesses such as those entertainment, hospitality, or internet based.

 

Keep a suspicious eye and a healthy scepticism about; –

  • Gifts of assets to friends, colleagues, or relatives – These may always be returned once the door of the court is closed.
  • Invented debts or financial obligations to related parties;
  • The sale of assets at an undervalue to somebody who will ‘warehouse’ it until the case is over
  • Travel to or connections with countries like Lebanon, Monaco, Switzerland, the British Virgin Islands, or the Cayman Islands ;
  • Involvement or connection with trusts or funds or organisations offering these structures, where amounts can be held by third parties but where the beneficiaries are not readily apparent. There are a myriad of these offered on the web, where secrecy is cloaked and there is pretence that the spouse does not control the asset.
  • Significant investment in a business interest using cash or third-party finance in anticipation of achieving future growth – The immediate effect will be a reduction in liquidity or ‘headroom’ to take on additional debt together with reduced business profitability. Be very careful of this money just disappearing and then reappearing later.
  • The introduction of a bonus scheme into an owned business, which again will result in reduced profitability;
  • An unexplained deterioration in business performance and profitability, often coupled with a sudden deterioration in health of the spouse.
  • Cash hoarding or the implementation of significant transactions in a period prior to that which has to be disclosed, such as just before the one year requirement for bank statements in form E.

 

Key documents that will assist your considerations are Form E disclosures, bank and credit card statements, tax returns, business financial statements, and any evidence of tax or financial planning.  However, consider also the information sources reference blow.

If there is a suspicion that assets have been omitted altogether, then some engage forensic accountants, or possibly an organisation comprising retired policemen or to complete various investigations in to the financial affairs of an individual or a business.  This is a challenging and potentially high-risk strategy – investigations of this nature will likely be both time consuming and expensive and have no guarantee of success. Hylton- Potts have a much cheaper service, and are particularly adept at uncovering husband’s hidden assets.

You can do some of the work yourself however to keep costs down;

 

  • Companies House – search for directorships or company secretary positions held.
  • Land Registry search – Against the name of corporate entities to check for property owned by a business with which an individual is involved
  • Internet and social media sites – These can reveal a surprisingly large amount about the business affairs and activities of an individual particularly where there has been recent trade or press coverage of business activities/deals completed. Spouses will post on social media of a prospering business that is in sharp contrast to the failing or depressed prospects. Overseas travel might also be referred to which will indicated where offshore business interest may lie.  Business associates, interests and relationships that are referred to may all lead of further enquiries. Maud Bergvelt at Hylton Potts specialises in this area.
  • Bank borrowing – Request copies of all loan applications made to financial institutions where an individual has an interest as these will likely require asset/income statements. Also, request copies of any annual net worth updates completed for existing borrowings.
  • Credit card statements – these should be reviewed for evidence not only of lifestyle (is this supported by the level of disclosed earnings ?) but also for travel to offshore locations.
  • Credit history – It is not possible to access the credit history of another individual, but if joint accounts are held you client can view their own history to determine whether any credit checks have been made by a third party as party of a loan or borrowing application – the reason for the application might then be pursued.
  • Pensions contributions and funds – Do these support the level of funds disclosed ?

 

 

Experience shows that the most efficient and experienced fixed fee solicitors and lawyers are in London, despite extra overheads.

The Central Family Court, previously the Principal Registry in London is more suitable, especially for wives, for complex or middle and upper-class divorces. The judges are far use to what other County Court might consider to be ‘high’ awards of capital and maintenance.

London judges in particular are very experienced and sophisticated when it comes to investigating assets, especially overseas companies and trusts, and anecdotally especially for wives.

London has been called the wife’s divorce capital of the world.

You can email us [email protected] or call us on 020 7381 8111

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