A landmark case will land in the Supreme Court in Britain in a few weeks time which may set a precedent for any person who tries to hide assets during divorce proceedings. Two divorced women have joined forces to sue their ex-husbands for lying about their true wealth and awarding low settlements.
Alison Sharland was awarded £10 million pounds when she divorced from entrepreneur Charlie Sharland, while Varsha Gohil received £270,000 and a car from her ex-husband Bhadresh Gohil. However Sharland believes that the true wealth of her husband is £150 million. It has since emerged that both men lied about their wealth during their divorces. This case could set a precedent that would expose spouses hiding assets and require them to pay.
One leading divorce law firm in England now employs a financial forensics team to track down assets that have been hidden, usually in a labyrinth of offshore accounts and companies. Other methods of hiding wealth are converting cash into antique office furnishings, cars, yachts and paintings.
British banker Scot Young hid hundreds of millions of pounds from his estranged wife, Michelle and was eventually jailed for contempt of court when he failed to disclose the whereabouts of the assets.
In the United States, the National Endowment for Financial Education (NEFE) released figures which suggest that nearly 60% of those they surveyed admitting to hiding cash from their spouse, and more than half admitted to hiding a major purchase from their spouse. There, it is illegal to lie about your income or assets during divorce proceedings but there are some well-worn paths to getting around the law. Forbes magazine lists some of these strategies, including overpaying tax and getting a refund after the divorce is finalised, creating phony debt or deferring the payment of bonuses.
In Australia, a 56-year-old physiotherapist from Sydney’s southern suburbs, facing divorce proceedings, was caught trying to deceive his estranged wife into thinking his practice was worth much less than its real value. But the physiotherapist was exposed when the wife’s solicitor hired a private detective to pose as a customer and visit the husband’s practice for some back rubs. The trial judge decided the husband was trying to conceal his true income and gave him less than 10 per cent of the family home.
The Family Law Act requires full and frank disclosure of the financial affairs of both partners who have to swear an oath and set out a complete statement of income, expenses, assets, financial resources and liabilities. Of course, this doesn’t guarantee complete honesty and it often takes the expertise of a family lawyer to track down any deception.
If you are considering separation or divorce and have concerns about the financial side of proceedings, please contact our experienced family lawyers today. We offer a FREE 10-minute phone consultation.