Division of assets in any separation or divorce case is never going to be easy, and many couples struggle to reach an amicable agreement in such matters. This often leads to a host of problems on both sides.
Recently, we have seen in the media that the Supreme Court has made two rulings that can only be seen as victorious for wives whose husbands tried to hide the truth about their finances. With this in mind, we take a look at financial disclosure and its important in separation and divorce cases.
The Basics Of Financial Disclosure
When couples are dealing with their finances during a separation or divorce, it’s a requirement that they both have a duty to make a “full and frank disclosure” both to the Court and their spouse. This means they have to be completely honest about every element of their financial concerns including their property, income, pensions and capital assets as well as any changes that can be reasonably foreseen. Judges take great pains to stress how important this requirement is. The law has established that in cases of fraud or non-disclosure, an Agreement or Order can be later set aside.
Why Does This Problem Occur?
When couples are going through a separation or divorce emotions are naturally running high. With both partners facing uncertainty and changes in personal circumstances, it isn’t too surprising that spouses feel defensive and keen to protect the income or assets they consider to be their own. This is particularly likely if they are angry about the possibility of their former partner sharing or recovering “their” assets or income. Whether this relates to a gift, inheritance, business or possibly financial improvement at some future time, many partners are reluctant to share their assets with their former spouse.
The law has declared that, during the handling of financial matters, an outcome which is fair to both parties must be reached. This means that all assets and income must be declared in order for this to happen. These latest court rulings have reinforced just how important complete honesty is in such matters. However, if a case is to be referred back to court following an agreement or order, it’s essential to establish that fraud or dishonesty has been evident. This may be challenging.
At one time, “innocent” parties were able to use “self-help” methods such as finding records or other documents, perhaps on a PC, which proved their former partner had not given full disclosure of their income or finances. However, in 2010, a decision was made by the Court of Appeal which stated that in one such case the downloading of financial information from shared computer networks was a clear breach of that particular defendant’s rights to confidentiality. The result was that the obtained information was ruled to be inadmissible evidence.
This decision hasn’t been helpful to clients with suspicions about their partner’s financial disclosures. While the Court of Appeal has said search or freezing orders may be obtained, without any compelling evidence this process is costly and problematic.
It’s therefore better all round to be confident that your divorce or separation case has been dealt with at all times by referring to all relevant financial and asset information with no risks of non-disclosure. While this ideal may never be reached, the recent decisions made by the Supreme Court have made it quite clear that non-disclosure and dishonestly are not going to be tolerated or accepted in court.
If you are going through a divorce or separation and need help with financial disclosure, call The Divorce Manager on 0800 294 0452 to book your FREE consultation.