Protecting Marital Assets on Divorce
One of the most significant issues arising out of relationship breakdown and divorce will be the division of matrimonial wealth and property. Clients often come to us asking how they can prevent the dissipation of assets, particularly when there are assets held abroad and if the other spouse controls most of the financial arrangements.
Any reckless or 'wanton' spending prior to the financial settlement which is carried out specifically to reduce the marital pot is likely to be cause for concern and may be viewed as bad conduct by a Family Court.
If you fear that your spouse is moving or hiding assets to prevent them from being considered as part of your financial settlement on divorce Goodsells Family Law can assist you. Our specialists in divorce financial settlements will work swiftly to ensure the right course of action is put in place to protect your best interests. Contact us today to find out how we can help.
Seeking an injunction to prevent wanton disposal of assets
Under section 37 of the Matrimonial Causes Act 1975, an application can be made to the Court for an injunction that will prevent the other party from disposing of or removing assets in an attempt to prevent their inclusion in a financial settlement on divorce.
If the application is to be made without notice to the other party the Court will need to be satisfied that there is real and imminent risk of assets being hidden or disposed of. When deciding whether to grant the injunction, the Court will consider whether the potential actions of the other party will be a genuine attempt to frustrate the financial claim of their spouse.
If there is not clear evidence to support the injunction, the Judge may also take into consideration whether remaining assets could be utilised to 'add back' the value of any losses once the financial settlement proceedings are underway.
While it is usually necessary to apply for an injunction quickly because timely prevention of the disposal may be preferable, if the Court feels the application was made in haste and is not justified, the Court can penalise the applicant with a costs order.
Expert legal advice is essential to ensure that your course of action is carried out correctly and appropriately to minimise the risk of penalty.
Disposal of assets during the marriage and 'adding back'
If one spouse has recklessly or 'wantonly' disposed of assets during the marriage, then the Court may be able to 'add back' a sum to reflect what has been lost from the matrimonial pot. However, the deliberate nature of such disposal will need to be proven to the Court. If the disposal was due to a medical condition or addiction, such as gambling, the Court may not be able to add anything back. Each case is considered on its own merits.
It's important to note that 'adding back' cannot create money that has been lost from the matrimonial pot. However, it can be a reflection of the value lost, so, instead of a 50/50 division of what remains in the pot, the court would be looking to adjust the award to the ‘wronged' spouse to account for the assets that were deliberately disposed of and this will mean the ‘at-fault' spouse would receive less.
How to spot the signs of financial misbehaviour
For the court to consider dissipation of assets as misconduct the amounts involved must be substantial enough to make a difference to the matrimonial pot and it must be 'frivolous and unusual', in other words the actions are not typical of financial behaviour during the marriage.
Signs to look out for include:
- Quick sales of assets, including property, stocks and shares etc.
- Unusual transactions on bank accounts/credit card statements
- Unexplained expensive holidays or trips away
- Unusual expensive purchases
- Significant gifts to friends and family
- Substantial cash withdrawals from bank and savings accounts
Dissipation of assets – what not to do
Just as a Court will see dissipation of assets as an act of litigation misconduct, it is also considered bad conduct if the other spouse attempts to gain access to financial information about their spouse's financial situation and behaviour. Such action may be illegal.
Attempting to hack into a computer to see details of your spouse's bank accounts is a course of action about which the Court will take a very dim view and you may be awarded a costs penalty for misconduct. In extreme cases of illegality, the police may become involved and criminal proceedings may ensue.
Understandably, it can be hard to spot when a spouse is moving or disposing of assets, especially if they have had the majority of control over finances in your relationship. If you believe your spouse is hiding or disposing of assets or wantonly spending money so as to diminish the matrimonial pot, speak to Goodsells Family Law today, so we can help you proceed with a suitable course of action.
Assets in your spouse's sole name
If your spouse holds significant assets in their sole name or if they have transferred assets into their name in a bid to prevent your access, you will still have an interest in them as part of the matrimonial wealth as long as they were acquired during the time of your marriage. A Court has the power to amend the ownership of an asset under the Matrimonial Causes Act 1973 and properties can be transferred from one party to another as part of an equitable settlement.
However, inherited family heirlooms and assets that were owned by your partner prior to the marriage or civil partnership are unlikely automatically, to be considered by the court to be part of the matrimonial wealth.
Specialist divorce advice for financial settlements
Our aim is always to assist clients in achieving the fairest settlements possible. We endeavour to do this with the minimum of stress and we will act swiftly to ensure that your spouse's actions do not harm your interests.
We will listen carefully to your situation before working with you to develop a strategy that aims to achieve your desired outcomes. Whatever your concern about divorce, contact Goodsells Family Law so that our divorce solicitors can provide the legal expertise you need.