Falling out over Finances, Episode 4: Marital Matters
In Episode 3 ‘Inheritance Issues’ we discussed how family members involved in monetary disputes can be embroiled in drawn out, emotional, legal battles. In matrimonial disputes, the timescales involved are often shorter than those in a deceased Estate, as from a practical perspective, individuals need to move on with their lives and divide the marital assets in an equitable settlement to facilitate this clean break.
Division of Marital Assets
Even in amicable situations, divorcing parties are not guaranteed a stress free process. Family and spousal relationships often result in individuals passing control of their finances to their significant other to deal with on their behalf, with one person generally taking charge.
In the event of a divorce or family dispute, trust breaks down and dishonesty can set in, potentially leading to a loss of control and being kept in the dark about your personal wealth, where your money has been spent, and what your true entitlement.
It is common for funds to be held as one in a marriage, especially when a joint bank account is in place and reliance is placed on one spouse as the breadwinner.
This uncertainty surrounding the marital assets gives rise to potential manipulation of financial information disclosed in divorce proceedings, leading one spouse to believe the other party has access to assets significantly in excess of their reported personal wealth.
Consideration of an individual’s lifestyle compared with their reported monthly/annual income and expenditure can arouse suspicion that the spouse may have access to funds in excess of what they have declared.
We have dealt with multiple cases where spouses have hidden assets and diverted funds in an attempt to protect their personal wealth, to deliberately and unfairly prejudice their spouse when the marital assets are divided.
The division of assets is not as simple as dividing everything in half if the total value of the assets isn’t clear. All marital assets need to be identified and valued correctly in order to achieve an equitable settlement and resolution for both parties.
It is therefore vital to have a full understanding of complex marital assets such as business interests and shareholdings, as a valuation of such assets for marital settlement purposes would be meaningless if the underlying figures within financial accounts or bank statements are not an accurate reflection of business or personal wealth.
Forensic experts can undertake investigation into hidden, tangible assets which were not declared as part of divorce proceedings, by tracing funds transfers and movement of cash assets between accounts.
Expert valuation should be sought to value business interests, shareholdings, intangible assets and to quantify partnership capital. Forensic accountants can therefore be instrumental assisting both parties to reach a fair settlement, and will communicate with both individuals regarding any valuation aspects or tax implications of asset transfers which may impact on settlement.
The Forensic Services team at Tait Walker has significant experience in family law cases and provide Expert services by way of a joint appointment from both parties, which benefits both parties and saves costs of instructing two separate Experts. Our work has assisted in many fair settlements based on true valuations of assets.
For advice and a no obligation meeting, find out more by contacting our Forensic Services Team on 0191 285 1321.
Our forensic specialists are professional members of Collaborative Family Law North East, whereby the collaborative process persuades the open sharing of documents and financial information between both parties, to encourage communication and smoothing negotiations and avoiding the requirement for Court proceedings.
Next Week’s Episode….
In the final Episode in this series, ‘Commercial Clashes’, we discuss how the lack of collaboration and communication in the ordinary course of trading can potentially result in catastrophic financial consequences for businesses, and look at the reasons behind an increasing number of entities now seeking alternative dispute resolution methods.