I am going through a divorce. My soon-to-be ex-partner has hidden assets, what are my options and what are the potential consequences for my partner?
Blog article by Tania Jones
If you are married in community of property or married out of community of property with the accrual system applicable, the biggest obstacles that divorce attorneys and their clients face occurs when a spouse hides their assets. This usually happens during the divorce or in the months and even years leading up to the separation of the parties.
How people attempt to hide assets
- During the actual divorce, a spouse simply does not include all of their assets when they list their assets and liabilities.
- A spouse will increase their expenses and liabilities to try to diminish the overall value of their estate.
- A partner decreases the value of their assets or their income – this is done by under-declaring values.
- Assets are moved into the names of family or friends so that they do not technically form part of the estate of the spouse in question.
How do you avoid being a victim?
- Look carefully at what is being declared with respect to expenses and income. During your marriage, you would have some insight into your partner’s spending habits. Double-check whether their declared income matches with what they earned during your marriage. Have they disclosed any bonuses or performance payments they usually got during the marriage? Point out discrepancies or anything out of the ordinary to your legal representative.
- Check which assets have been disclosed and ensure nothing is missing from the list. In the case of immovable property, have your legal representative do a deed search in the name of your spouse. In the case of businesses, do a search with the Companies and Intellectual Property Commission to see if they have any other registered businesses. If there are assets that have not been disclosed, ask your legal representative to request further and better discovery to ascertain where the missing assets have gone.
- If you are aware that assets have been moved, speak to your legal representative immediately. Your lawyer may do the following:
a. Use this as an advantage in the divorce and ask that the court grant a forfeiture of assets in your favour due to your spouse’s bad faith.
b. In the event of a financial disclosure being completed incorrectly and on purpose in order to hide assets, then your spouse may be up for a charge of perjury or fraud if he/she has hidden assets.
c. Under specific scenarios, you may even be in a position to approach the court to ask that the change of ownership be set aside. This will depend on the type of asset, the value of the asset in question, and how the ownership was changed in the first place.
For more information: Tania Jones / TaniaJ@hammondpole.co.za
