Financial disclosure is a must when getting divorced

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Photo Credit: Alan Cleaver via Compfight cc

When dealing with the matrimonial finances I always advise my clients that the only way to fully protect themselves is to go through the process of financial disclosure (gathering together documentary evidence of all assets, income, liabilities, pensions etc and disclosing them to your spouse and vice versa). Many divorcing couples do not wish to go through this process because it costs more in fees to do it. I always tell my clients that it is better to spend the money now and get an agreement that is an air tight as possible rather than face the possibility of a challenge to the agreement later on.

My above advice has proved correct this week when the court has ordered a 1.8million divorce settlement be set aside because the husband lied about his assets. The couple divorced in 2009, the wife did not have legal advice and it is not known whether having legal advice would have affected the outcome, however I do not think it would have. After the agreement was reached the wife found documents indicating the husband had shares in a company worth £740,000.00 which the wife was unaware of. The husband told the wife the trading value of the company was nil so the shares were worthless, in actual fact the company had an annual turnover of around 50 million. The husband also had an £800,000.00 investment which was undisclosed.

The Judge found that the husband had deliberately been false and disclosed half truths and so, due to the above assets, a further capital payment may need to be made to the wife.

Given that legal advice in these matters is scarcer due to the lack of legal aid it is even more important that financial information is disclosed accurately, concisely and completely.

Even though disclosure may cost more now, it will likely save you money and time in the long run.

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