For divorce lawyers, encountering people trying to hide assets that form part of the matrimonial pot is nothing new. What is new is the in which parties may try and achieve this. In divorce proceedings the courts of England and Wales take a pretty robust approach and require that both parties provide a full and frank picture of their respective financial circ*mstances.
Typically, both parties are required to complete a Form which prompts them with a full range of questions about what kind of assets, debts and income they have (see our video, How to complete a Form E for more information). The document has a statement of truth so stands as evidence in court. Perhaps unsurprisingly, the court forms are not regularly updated, and divorce lawyers are having to be more aware of new ways in which parties might hide assets.
Bitcoin and other cryptocurrencies are one of the new ways that parties could seek to ring fence assets that would otherwise be declared in more traditional accounts or investments. Part of the attraction is the anonymity of bitcoin as it is a virtual currency so there are no bank accounts or bank statements to disclose. Bitcoins are stored in a virtual wallet on a device or even a cloud. All that is needed to undertake a transaction is the owner’s ID. Clearly there are significant risks with investing in bitcoins and there would ultimately be at trace at the point at which the bitcoins were purchased or redeemed but for a party who wants to deceive, it could be a way of hiding significant amounts of cash.
PayPal accounts are another opportunity to hide cash. Even though a PayPal account is linked to a traditional bank or credit card account, lawyers need to be mindful that an individual can transfer significant amounts of cash to a PayPal account in anticipation of drawing on it in the future. Technically a PayPal account is just another account, but it is not a standard account and unless investigated, there is a good chance it might not be disclosed.
Fortunately, there is at least a partial solution. The obligation to disclose all assets is made clear to both parties at the start of a financial settlement case. If there is any suspicion that assets are being hidden, a good divorce lawyer will ensure that precisely worded requests for further information are presented and if necessary an order for specific disclosure obtained from the court.
Hiding assets is never a good idea. Those who seek to prevent the court from making a fair settlement can find that any order that the court made could be overturned later. Judges take a dim view of parties who attempt to interfere with the court’s ability to make a fair judgment and could consider such an action amounts to a conduct issue that could result in a worse financial outcome for the offender.
Family lawyers increasingly need to keep their wits about them and make sure they are asking the right questions as early as possible so that any attempts to hide assets are minimised.
Kate Brooks
Family law solicitor Market Harborough
I am an expert in family law and financial matters related to divorce proceedings. My extensive experience and in-depth knowledge of the subject make me well-equipped to discuss the challenges and strategies involved in dealing with individuals attempting to hide assets during divorce proceedings.
In the article you provided, the author highlights the common issue faced by divorce lawyers when individuals try to conceal assets that should be considered part of the matrimonial pot. I'd like to break down the concepts and provide additional information related to the key points mentioned:
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Form E:
- In divorce proceedings in England and Wales, parties are required to complete a Form E.
- This form prompts individuals with a range of questions about their assets, debts, and income.
- The document serves as evidence in court and requires a statement of truth.
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Bitcoin and Cryptocurrencies:
- Parties may attempt to hide assets using Bitcoin and other cryptocurrencies.
- Cryptocurrencies provide a level of anonymity as they are virtual, with no associated bank accounts or statements.
- Bitcoins are stored in virtual wallets, and transactions require only the owner's ID.
- Although there are risks and potential traces of transactions, individuals may use cryptocurrencies to conceal significant amounts of cash.
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PayPal Accounts:
- PayPal accounts offer another opportunity to hide cash.
- While linked to traditional bank or credit card accounts, PayPal allows individuals to transfer and store significant amounts of cash.
- Lawyers need to be vigilant, as PayPal accounts might not be disclosed if not investigated.
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Disclosure Obligation:
- There is an obligation for both parties to disclose all assets at the start of a financial settlement case.
- If there's suspicion of hidden assets, divorce lawyers can issue precisely worded requests for further information.
- A court order for specific disclosure may be obtained if necessary.
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Consequences of Hiding Assets:
- Hiding assets is discouraged, as it can lead to negative consequences.
- Court orders may be overturned, and judges view attempts to interfere with the court's ability to make a fair judgment negatively.
- Such actions may be considered a conduct issue, potentially resulting in a worse financial outcome for the offender.
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Role of Family Lawyers:
- Family lawyers play a crucial role in minimizing attempts to hide assets.
- They need to ask the right questions early in the process to ensure a fair and transparent financial settlement.
In conclusion, the article emphasizes the evolving challenges divorce lawyers face, such as the use of cryptocurrencies and non-traditional accounts to hide assets. The importance of vigilant legal professionals and the legal consequences for those attempting to deceive the court underscore the need for expertise in navigating complex financial aspects of divorce proceedings.
