What’s the penalty for hiding assets in a divorce in Australia?
What’s the penalty for hiding assets in a divorce in Australia? We examine why it’s not a good idea and what to do if you think the other party is hiding something.
Understanding the concept of disclosure in property settlement
When dealing with a property settlement, you’ll likely encounter the term ‘disclosure’. At its core, disclosure involves providing all relevant documents that illustrate your financial circumstances to the other parties involved. It might sound straightforward, but its complexity often lies in the various meanings and applications.
For instance, ‘disclosure’ can refer to:
- A specific document;
- An obligation; or
- The overall process.
Alternatively, it can also refer to the act of providing a document or sharing information about an asset, liability, or financial resource. Understanding whether a particular document is required to be given to the other party can sometimes be challenging. Therefore, it’s beneficial to consult with a family law expert.
Typically, ‘disclosure’ includes bank statements, pay slips, mortgage statements, and superannuation statements. The primary purpose of disclosure is to clarify what assets are available for division before negotiating how to divide them. Additionally, it can shed light on a party’s financial circumstances before, during, or after the relationship.
The penalty for hiding assets in a divorce in Australia
What happens when assets are hidden?
Sometimes a party might try to hide assets to exclude them from the pool of property to be divided. Alternatively, some parties refuse to disclose documents they think might disadvantage them. Both scenarios violate the obligation to disclose. If the Court discovers such deceit or non-disclosure, it can lead to several consequences:
- An adverse finding that as to the party’s perceived credibility
- ‘Adjustments’ being made to the property pool to ensure the other party is not disadvantaged
- Costs orders against the party, requiring them to pay some or all of the other party’s legal fees
- Dismissal of the party’s application in part or in whole
- In the most extreme cases, the party could be found in contempt of court, leading to serious penalties.
Transferring or disposing of assets
In some cases, parties might transfer property to a friend or family member, intending to get it back after the property settlement. Although the party can argue they don’t own the property, it’s often a misleading half-truth. The Court has the power to undo such transactions if it’s determined they were done to defeat the claim of the other party.
What if you suspect hidden assets?
When you suspect hidden assets, the disclosure process often leads to more information coming to light. Working with forensic accountants, we follow the financial “breadcrumbs” to uncover hidden assets. We utilise public registers like ASIC (companies), the Titles Office (real estate), or file a Superannuation Information Request.
If necessary, we can issue a Subpoena to obtain documents held by another person or organisation. A Subpoena is a court order that compels an entity to provide necessary documents or evidence to the Court.
Navigating disclosure with expert family lawyers
As expert family lawyers, we’ve seen all forms of deceit and are well-versed in uncovering hidden assets. We understand the challenges and are ready to guide you through these complex situations accordingly. Whether you suspect deceit or simply want to understand more about disclosure in property settlements, our team is here to help.
Contact our friendly team directly or request a call back via the form below. We look forward to assisting you.
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