With rising rates of divorce in the UK the issue of asset values and asset concealment is becoming increasingly important.
This issue has become particularly visible in light of the recent financial crisis and a number of high profile court cases.
Divorcing Couples’ Duty to be Honest with Each Other
In a recent High Court case, the sitting Judge ruled that couples have a duty to be honest with each other when contemplating and engaging in divorce proceedings, especially in relation to assets. These proceedings were held in camera which means that the parties involved retained their anonymity.
The man, a successful business tycoon, lied to his wife about the success of his investments. Both parties reached a private agreement in which the wife was to be paid £1.8 million upon cessation of their marriage. After signing the agreement the wife, much to her dismay, discovered the true extent of her husband’s success and the full value of his assets; some were significant shareholdings in a company with £50 million in turnover.
The Judge held that the private settlement ought to be discarded because of the dishonesty on the part of the husband. Accordingly he called for the renegotiation of the settlement on the basis of inequity.
The Importance of Asset Values in Divorce
The value of assets is of huge importance to divorcing couples. According to the law, as it stands, either party to a marriage is potentially entitled to a share in property or assets which the other party holds.
Many spouses seek to hide assets in order to keep them safe and secure from the outcome of proceedings. But concealing assets can have profound implications for both parties. Most obviously are the circumstances highlighted by this recent case whereby the spouse who was lied to may miss out on a share of property to which they are entitled.
If the concealment is discovered, the lied-to spouse may recover some of what they are entitled to and the adverse consequences flow the other way. Notable cases have seen spouses that concealed assets imprisoned for contempt of court and perjury for extending their dishonesty into the courtroom.
Couples must remember that the duty to be honest with each other is not simply a quaint moral obligation that exists within a marriage. When it comes to disclosure during divorce proceedings there exists a legal obligation to honestly provide information regarding any assets or property held.
The stressful and personal nature of divorce means that spouses often seek revenge on their ex-partner in a number of ways, one being the hiding of assets. Such is the nature of many divorces. However, recent judgments have highlighted the need for honesty when negotiating settlements; an approach that is likely to be easier on both parties in the long run.
If you would like to discuss the implications of this case or you need advice in relation to other family law issues, please contact a member of the Family law Department by telephone on 0207 611 4848.