Can I hide assets I don’t want to share in our financial settlement?

Going through separation is an emotionally charged experience which can impact your rational decision making. You may have feelings of anger, sadness, rejection or abandonment which can invoke thoughts of punishing your ex through hiding assets.

You may think to yourself “I worked harder than my ex so they shouldn’t get as much as me” or “they left so they don’t deserve anything” or “they shouldn’t have a share of an asset that is in my name only, it’s mine”.

When we are having feelings of loss of the relationship, loss of respect for our partner or loss of our values through crisis we can turn to survival or revengeful behaviours, to regain some control or power in our life. It may be out of character for some people, or it may be true colours coming out for others.

Friends and family may encourage you to hide assets advising not to tell the other party they exist such as bank accounts in sole names, cryptocurrency, shares, overseas assets etc. They may even suggest you withdraw lumpsum money from bank accounts, transfer large amounts of money to family members or friends to get it out of your name or even sell assets such as cars, boats, household goods and keep the proceeds hidden.

STOP…… This can get you into serious trouble with the law.

The Family Law Act 1975 Duty of Disclosure requires both parties to provide full and frank disclosure of all relevant financial information with supporting documentation which includes all assets, liabilities, and superannuation. Both parties are required to provide financial information regarding financial income streams, assets disposed within 12months pre-separation to current date and any lump sum payments received such as redundancy, injury, inheritance payouts. Assets in joint names AND sole names are to be disclosed to the other party such as properties, businesses, trusts, bank accounts, shares, superannuation, overseas assets, cars, boats etc.   

If access to financial information has been deprived throughout the relationship or at separation this can be deemed family violence, where financial abuse has occurred. This can severely impact your financial settlement outcome as the court may adjust the share of the property pool in the other party’s favour and possibly provide a costs order against you.

Trust can be eroded during separation and some people decide to hire a forensic accountant to help uncover any hidden assets. If they cannot afford a forensic accountant, they may decide to request 2-3 years pre-separation to current date bank statements so they can review each transaction to ascertain if withdrawals of large amounts of money or transfers to undisclosed accounts have occurred. Other supporting documentation requested are the last 3 x payslips, last 2 x ATO tax returns, 2-3 years of business or trust financial reports etc.

Often people want to be reimbursed for lump sum monies they may have contributed, or payments received such as bonuses or inheritance. They might suggest to the other party to be reimbursed or exclude from the property settlement. This is not full and frank disclosure if you remove assets, liabilities, superannuation, contributions, income streams to be assessed by a lawyer on what you may be entitled to prior to negotiating in mediation.

You can negotiate who gets what net assets and superannuation whether that be the family home, investment property, business or any other asset. You may decide to sell and split proceeds or allocate an asset to one party and the other party may keep another asset of similar value. If one party wants to retain the family home, they may then do a cash payment for the share of the other party based on % split.

When you engage a mediator for property mediation, they will help you identify what is required for disclosure, supporting documents to be exchanged, create a balance sheet to agree values and capture your contributions and future needs. You will then each go for a legal consultation to gain advice on what a fair and just outcome might be so that you are ready to return to negotiate in mediation.

If you reach agreement on a financial settlement and proceed to have orders drawn up by your lawyer and submitted to the court, it is important to be aware that if the future it is uncovered that you had hidden assets or grossly undervalued an asset, your orders could be overturned. Disclosure of ALL assets at current value will need to be sought and the court will decide on how the split of assets will occur based on the impact of your actions and whether you will solely bear both parties legal costs.

Adhere to financial disclosure obligations and negotiate for a fair and just outcome in property mediation.

Author Cheryl Duffy, Divorce Coach, Family Dispute Resolution Practitioner, NMAS Mediator, Parenting Coordinator, Divorce Conflict Coach, Conflicted Coparenting Coach and Mental Health First Aider.

www.thedivorcecentre.com.au