Eight ways an ex-partner can hide money from you

Unfortunately, an ex-partner can still hide money and other assets from you even after separation, in an attempt to reduce the asset pool available in a family law proceeding. It is common for people to attempt to hide assets or minimise their true value to benefit themselves. It is important for parties to a family law proceeding to provide a full and frank disclosure of their financial circumstances under rule 13.04 of the Family Law Rules and rule 24.03 of the Federal Circuit Court Rules. Parties must provide information on financial resources such as their income, assets, liabilities, expenses. Our previous article demonstrated the court’s view on non-compliance with financial disclosure rules, which is seen as a serious contravention to proceedings.

Here, we look at 8 different methods an ex-partner can hide money from you:

  1. Depositing money into trusts or your children’s accounts

An ex-partner may have the misconception that if they funnel money into a trust, their money will be safe from family law proceedings. However, disclosure of trust activities must be provided as part of the rule of full and frank disclosure. Alternatively, an ex may transfer money into an account in their children’s name, which means their ex-spouse will not have control over that account.

  1. Minimising personal income

An ex can attempt to minimise their personal income during family law proceedings to demonstrate that they do not have a high amount of funds and consequently, avoid a larger pay-out on spousal maintenance or child support payments. A person may use strategies such as deferring their salary or bonuses until after the family law matter is settled.

  1. Stockpiling cash

It is common knowledge that it is much easier to hide cash rather than money kept in an electronic account. A person may even attempt to ask their employer to pay them “under the table” in cash so the income is never reported. Additionally, some people may withdraw extra cash while grocery shopping using their debit/credit card. This simple strategy means that on bank account transaction documents, the full amount of grocery shopping will show up under “Shopping”/“Groceries”. As long as no one finds the receipts, people may never question the amount of money spent on groceries.

  1. Reducing bank account balance

A person can attempt to minimise their bank account balance by purchasing expensive items which can be resold later after the settlement, or even purchasing gift cards which can be refunded or spent later on purchases. Another strategy is “lending” money to family, friends other trusted individuals who can then return the money back later after settlement.

  1. Offshore accounts

An ex-partner may attempt to hide money in offshore bank accounts, which is a bank account located overseas. They may secretly transfer money to the offshore account and can use the account to purchase significant new assets such as property and cars.

Sometimes, an ex’s behaviour before separation may indicate they have hidden significant assets overseas. For example, if a wife noticed her husband was taking frequent business trips around the time before separation, it may be reasonable to assume that the husband hid assets from his soon-to-be ex-wife.

  1. Declaring bankruptcy

A person may also declare bankruptcy to project the image that they have little to no money or assets to contribute to the asset pool. If a person is declared bankrupt, they have almost no control over their assets and therefore cannot transfer money and other assets for the purpose of family law property settlements.

  1. Transferring money as an investment into a company

If an ex-partner is a business owner, they may invest money into the business in an attempt to hide money. Alternatively, a person may even start a private company and transfer their own money into the new company. A business owner can also purchase significant assets using this money and list it under business expenses to avoid suspicion.

  1. Overpaying on expenses and debt

An ex can hide money from you by simple overpaying on expenses and debts such as credit cards, bills, and taxes. If a person overpays a credit card bill, the credit card company will owe money. A person can simply notify the credit card company of the overpayment after settlement and receive a refund.

It is not recommended to attempt to hide money and other assets from your ex-partner in a family law proceeding. It is likely the truth will be revealed, which may result in the court making a decision which is advantageous for the other party.

 

If you have a family law matter, contact one of our experienced family law solicitors on (02) 9920 1787 to discuss how we may assist you to achieve a favourable outcome. Pannu Lawyers extensively practice in Family Law and regularly appear at Courts throughout New South Wales such as Federal Circuit Court Parramatta, Family Court of Australia Parramatta, Federal Circuit Court Sydney, and Family Court of Australia Sydney.

 

The above information is intended as general information and is not to be relied on as legal advice.

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