Clients who have separated, particularly those who have not been much involved in financial matters during the marriage, often ask; ‘How do I know he/she is not hiding anything?’
It is a good question, as each person is entitled to a fair share of the matrimonial assets, but how can that be calculated if there is the worry that not all the matrimonial assets have been accounted for.
This is particularly relevant if the marriage is of a long duration or there are lots of financial assets including business assets.
In many cases there is transparency. There may not be much by way of matrimonial assets, the client might be sure that he/she has all the financial information or the client might simply trust the other party (it does happen!)
Often the matrimonial property only consists of the family home, the contents and a depreciating car so there is not much to conceal.
In other cases, however, the position may be less straightforward.
Typically the wife (or it could be the husband) is simply not aware of everything that has happened throughout the course of what may have been a long marriage.
Residential or commercial property may have been purchased; bank or building society accounts opened; shares acquired; businesses started and maybe sold; pensions are taken out – and so the list goes on.
And as new technology becomes more common, what about cryptocurrencies? At least with other forms of assets, there is invariably a paper trail that can be followed if the need arises.
Good luck trying to follow a paper trail with bitcoin. Virtual currencies don’t lend themselves to that.
But whether analogue or digital, any asset acquired during the course of the marriage should be taken into account.
So how does a client ensure they are not being short-changed? What safeguards are in place to protect the client who believes that everything is not being disclosed?
To start with the good news; if the case is taken to court there is a formal process for forcing the other party to reveal what assets there were at the date of separation.
The procedure is called a “specification of documents’ and basically it allows the client to ask the court to order the other side to produce all the relevant paperwork relating to particular assets, or categories of assets at the relevant date. ( the date of separation).
This can be useful if, for example, the client knows the other party has a number of bank accounts but doesn’t know with which bank or banks.
The client can ask the court to order the other party to reveal all the bank accounts he/she held at the relevant date.
If the other party does not produce the information ordered a Commission can be fixed which involves the other party is required to attend a hearing where they are questioned by the Commissioner and the other solicitor in relation to the assets in question.
This procedure has teeth because the other party will be put on oath at the Commission and if they were found to have lied they could be found guilty of perjury.
The procedures are effective but not foolproof. If the client has no knowledge of an asset at all they cannot ask questions about it.
Having said that, in the normal course of a case, both parties are called upon to reveal all the assets and if they are shown not to have done so there may well be adverse consequences.
In reality, in the vast majority of cases before the courts, there is full disclosure.
The bad news is that the situation is far less clear cut in those cases where the financial settlement is negotiated ‘out of court’
Over 90% of cases that involve finances are resolved either by the parties themselves or most commonly by family solicitors acting on their behalf.
The solicitors will correspond with the other side, ask each other for details of all the matrimonial assets and once that information has been ingathered negotiate a settlement.
The Family lawyer has a professional responsibility in this type of situation. If the lawyer asks his/her client to provide details of all their assets and finds out that the client has not been candid then he/she cannot continue acting for the client as the client/solicitor relationship has broken down.
It is possible, however, that a particular type of client (and they are very rare) will not tell their solicitor about all the assets and of course the Family Lawyer has no way of knowing this.
The lawyer will tell the other side that there has been full disclosure but, in fact, there has not. A complete lack of transparency.
How best to combat this?
In practice, a wife or husband will be aware of the type of person the former partner is. They will know if he/she is secretive about money. They will expect that the former partner will try to hide something and they will advise their family lawyer of this.
Their lawyer will write to the other solicitor expressing doubt that all the assets have been revealed and then the other lawyer is professionally bound to put that question to the other party.
In nearly every case when put under the microscope and with the only other option being to lie to their lawyer the other party will ‘come clean’.
But not in every case. If a client doubts that the other party is still not telling the truth then a court action should be raised which will allow the formal disclosure process to be brought into play.
If you have doubts about your former partner’s transparency you will need to take advice from experienced Family lawyers.
Contact Rooney Family law on 0800 779 7848.