How do I hide assets from my ex-partner in a divorce in Australia?

You are headed for a world of suffering. You should never try to hide assets.

In Australia, you have the legal duty of “full and frank disclosure”. Deliberate failure in this obligation will have serious repercussions against you and your chances to achieve a just and equitable financial settlement.

This obligation applies regardless of how you are negotiating. If you are using mediation, negotiating privately, or going through the Family Court - your legal obligation remains. If you are represented by a lawyer they will undoubtedly inform you of your obligations and the severe repercussions that may happen, even years after a settlement has been finalised.

This is a continuing duty, meaning you must update your disclosure if your financial circumstances change.

So why do people consider hiding assets?

Divorce and separation is a seriously disruptive life event. It combines both personal and financial trauma.

There is a fear of what comes next and how you might survive financially past this event.

There are negative emotions and the loss of trust in a former partner. A person may feel duped or that they are losing the results of a lifetime of work.

The fear of being treated unfairly in a settlement can also drive people to consider hiding assets.

If we agree to a settlement and I have hidden assets, they cannot claim them as the divorce is finalised.

This is false. When hidden assets are discovered, agreements can be set aside by the court on grounds such as fraud, non-disclosure or misrepresentation.

It is not a pleasant experience to explain to a judge that you have withheld information from settlement negotiations and there is a high chance of an adverse decision. You may face costs orders against you and adverse property adjustments in new court ordered division of property.

The effect of loss of credibility

In family law, decisions often depend on credibility. If you’re shown to be dishonest, the court may distrust any of your evidence. They may impose more forensic financial disclosure requirements. This loss of credibility may affect any rulings they make in relation to the settlement.

From a purely personal perspective, you should consider how the loss of credibility may be perceived by children. You will want them to think highly of you and feel that you acted honourably during a seriously difficult life event.

Hiding assets and financial resources results in a worse financial outcome

In circumstances where one party has hidden assets, liabilities, superannuation and financial resources, the financial outcome is often worse for the party trying to hide the assets.

Apart from it affecting the fair and equitable division of the property pool, expect higher legal fees while the disclosure failure is remedied. This also has the effect of lengthening the time taken to resolve the matter.

The court can also draw adverse inferences where it believes disclosure has been incomplete.

How hidden assets are discovered

The assumption that people have that they won’t get caught is inaccurate. There are methods to uncover hidden assets and even the smallest clues may start an investigation.

Unusual transfers, missing funds, changes in financial behaviour can all trigger suspicions.

Methods of investigation may include subpoenas to banks and financial institutions, the examination of ATO records and may lead to forensic accounting.

The investigations are not limited to the hiding party and may involve disclosure from third parties such as business partners.

So, can I hide assets from my partner during a divorce?

No. Don’t do it.

What to do instead

Focus on protecting yourself the right way. Be organised. Early disclosure reduces settlement times and costs. List all of your financial aspects and provide supporting documentation. Keep all this information in a secure space like Decouple.life so that you are in control.

Being absolutely transparent helps you build credibility and trust in the negotiation process.

Seek a fair outcome in line with your personal circumstances. This is not always a 50/50 split in every case. Consider both financial and non-financial contributions, future needs and the care of children in the outcome.

Seek input from your former partner. Although this may be difficult given the current state of your relationship, tools like Decouple.life can help diffuse difficult interactions. Decouple allows for the identification of assets, liabilities, income and superannuation accounts as well as the sharing of supporting documentation.

Your former partner can accept amounts or propose different values. You do not need to agree, but you both will get a good understanding of where you are at and what you are negotiating over while leaving you in complete control of your disclosure process.