Financial abuse is a common issue for many ex-couples after separation and through the family court.
In the midst of separation or divorce, some male and female ex-partners go to extreme lengths to hide money in order to reduce their future liabilities to the other parent/ex-partner or children of the relationship.
Below are 10 common ways an Ex can hide money from the other party
- Depositing money in trusts or in children’s accounts that the other parent has no control over
- Manipulating joint Self-Managed Retirement Funds
- Drawing money on a redraw mortgage
- Declaring bankruptcy to avoid payment
- Minimising income by deferring salary or bonuses until after settlement
- Minimising bank account balance by ‘lending’ money to friends, overpaying creditors (credit cards, tax, etc.) or buying expensive items that can be sold later
- Stockpiling cash
- Hiding personal assets via a complex web of companies
- Using trust structures
- Hiding funds in offshore foreign bank accounts
Special Note about non-disclosure in Family Court
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. The duty of disclosure is ongoing, so if there are changes in parties situations or facts come to light that were hidden even years after orders were made, then it can be a basis for asking the Court to change orders. The court in recent years has been very harsh on people who have not fully and frankly disclosed their proper financial position.
Special Note on Hidden Asset Search
A hidden asset search involves the use of a forensic accountant or private investigator who can undertake certain searches to help uncover the true status of your spouse’s assets. There are three main assets searches that can be performed: a Brokerage Account Search; a Bank Account Search, and a Public Assistance Search. The Brokerage Account Search is used to locate any stocks, bonds or securities that may be owned; a Bank Account Search can locate all bank accounts the person may have in their name and which bank they are with, and a Public Assistance Search can identify any payments or benefits the person may be receiving from government departments such as Centrelink or Family Assist.
Finding where the money has gone
If you have grounds to suspect your ex-partner has hidden a lot of money and other assets, you could use a forensic accountant to assist you to find it. This service can be expensive, but the accountant should be able to advise whether it is worth pursuing. You can also enquire about a ‘no win, no fee’ arrangement. Forensic accountants work alongside your lawyer. Find a forensic accountant through your lawyer, or search the Certified Practicing Accountant Australia website.
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