Hiding Assets in Family Law
When the loss of trust between separating parties gets intolerable, it can often escalate further during separation and property settlement proceedings, especially if one of the parties becomes suspicious that the other party is hiding assets or they simply do not know as much about the financial aspects of their relationship as their former partner does.
The Family Law Act requires that the parties to property dispute proceedings must provide “full and frank” disclosure to each other and to the Court. Failing to do so can result in severe penalties and further costs.
All parties to Family Law Property Proceedings are under a “duty of disclosure” which requires that they must provide each other with all the information and documents relevant to their case. This will include information that the other party may not know about. This includes information recorded in a paper document or stored by some other means such as in a computer storage device.
The obligation requires disclosing all sources of income, interests in property, whether both currently owned or disposed of by sale, transfer or gift in the year immediately before the parties separated, as well as other financial resources whether these are held in the party’s own name or are held by companies, trusts or other like structures under which the party derives a benefit.
Disclosure of Financial Circumstances requires that each party must complete a Financial Statement providing details of all Assets, Liabilities, and Financial Resources in their sole name or held in joint names with another party. The Rules also require that an amended Financial Statement must be filed if a party’s Financial circumstances significantly change during the course of negotiations and proceedings.
Each party can request relevant documents from the other party – these may include:
· Bank Statements
· Superannuation Statements
· Tax Returns and Pay Slips
· Property Valuations
· Insurance Policies
· Share Certificates
· Trust Deeds
· Business, Partnership or Company documents
· Title Deeds and Leases of Property
Failing to comply with this Court Order is a serious offense for which there is a range of penalties from the Courts from fines to jail time.
When the parties to a Family Law Property Settlement resolve their dispute by agreement or the Family Court makes an Order in relation to the division of their property then, subject to any right of appeal against the Order, the agreement or Court determination is binding on the parties. Neither party can generally attempt to “revisit” the outcome at a future date.
Full and frank disclosure by all parties to the proceedings will generally result in both parties negotiating (or the Court making Orders) with confidence that the asset pool for distribution is accurate which then enables a fair division of the assets between all parties.
Due to the many possible twists and turns in gaining full disclosure, it is recommended that you seek professional advice and assistance to ensure a fair and equitable outcome.