Asset Division is often the most important aspect in a contested divorce.
Unlike other matters which can be modified if circumstances change post-divorce, property division is usually final. However, recent legislative changes such as the LOTR will provide a new lens for those seeking to find hidden assets.
Unfortunately it is common for a spouse to hide assets or deliberately misstate income. This is especially likely for spouses who are self-employed. Where there are opportunities to overstate expenses or create phoney debt, there is opportunity to hide assets from one’s spouse. Where there is the ability to keep income artificially low, or to keep money “off the books” by working for cash, a family law lawyer will be extra diligent. If the spouse owns complicated assets such as business interests, numbered companies, offshore holdings, stock and stock options, pensions, deferred compensation, hidden bank accounts or hidden shell (aka “shelf”) companies you will need experienced legal advice to trace and unwind these hidden assets.
Hidden Assets are Common
In British Columbia most divorcing spouses are required to file a sworn financial statement Form 8 setting out their income, expenses, assets and debts. Before it is filed, the spouse must swear it to be true. But while giving a false sworn statement is unethical and a criminal offence, hiding assets in divorce proceedings is more common than most people would expect.
Finding Hidden Assets
When you are served with your spouse’s financial statement, many questions may arise. You will have the opportunity to obtain or inspect further documentation (bank account statements, corporate records, purchasing agreements, etc.). You will be able to cross-examine your spouse under oath on that financial statement prior to trial. This may lead to learning more details (or admissions) about their true financial situation.
LOTR: The Land Ownership Transparency Register
You may wish to conduct property searches, company searches, and other background checks using online databases. These searches are routine for family law lawyers, and we keep up-to-date with legal and technological changes. For example, recent legislative changes affecting the transparency of land ownership in BC means new knowledge of hidden assets is becoming available through LOTR: The Land Ownership Transparency Registry. If you suspect your former spouse did not fully disclose all assets, you may soon wish to check this database and contact our office for advice.
If the amount suspected of being hidden warrants it, an experienced lawyer may advise that forensic accounting will be required to fully discover a spouse’s hidden wealth. There are many ways to achieve the same end which can also be explored, but if forensic accounting is the chosen direction, an experienced lawyer may be able to ensure such costs are recoverable to you.
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