How to Protect Your Money During Divorce
When a marriage ends, it’s essential to achieve a fair division of assets such as savings, pensions, property, debts, and any inheritances. However, some individuals may attempt to conceal or dispose of assets. If discovered, the courts will view such behaviour adversely, potentially imposing serious penalties. Below, we address some common questions about safeguarding finances in a divorce.
Can You Hide Assets Before Divorce?
While it is theoretically possible to attempt hiding assets, doing so successfully is rare. Full and frank financial disclosure is a legal requirement in divorce and financial remedy cases. When a party fails to comply, it often becomes apparent during the exchange of financial information.
- Penalties: If an individual is found to have concealed assets, the court can impose sanctions. These may include awarding a greater share of marital assets to the innocent spouse or ordering the asset-hider to pay their spouse’s legal fees.
- Adverse Inferences: Courts can draw conclusions that a person is likely hiding more than they admit if they fail to provide satisfactory disclosure.
Ultimately, attempts to hide assets are likely to backfire and can result in serious legal and financial consequences.
How Long After Divorce Can My Spouse Claim Assets?
The answer depends on whether your financial affairs were formally resolved during the divorce.
No Court Order
- If you divorce without a consent order or other approved financial settlement, claims can remain open indefinitely. Even many years after the divorce, one spouse could still seek a share of the other’s assets.
- While remarriage typically bars any future claim for maintenance, it does not prevent a claim against property or capital.
With a Court Order
- Incorporating a consent order into your divorce settlement closes off future claims. This is the best means of ensuring you will not face a financial surprise years later.
- If either party passes away without a financial order in place, the ex-spouse may also be able to claim against the deceased’s estate, creating significant distress for relatives.
Thus, finalising financial matters at the time of divorce, including who owns which assets, is the most secure way to protect both parties.
Key Takeaways: Protecting Your Finances
- Seek a Consent Order: By agreeing a financial settlement and obtaining a court-approved consent order, you remove the possibility of future financial claims.
- Avoid Concealing Assets: Attempting to hide assets is risky, as the courts can impose penalties and potentially award a larger share to the other spouse.
- Timely Division of Assets: Addressing property, savings, pensions, debts, and inheritances during the divorce provides clarity and prevents further disputes down the line.
Need Further Advice?
For tailored guidance on safeguarding your assets or finalising your financial settlement, speak to our experienced team of family law solicitors.
HM & Co. Solicitors
186 Lower Road
Surrey Quays
London SE16 2UN
Telephone: 02071128180
Email: info@hmsolicitorsltd.com
We’ll help you navigate the legal process and secure a fair agreement that protects your interests for the long term.
Your Questions, Answered
FAQs
How to Protect Your Money During Divorce
Can I transfer money before divorce?
Q: Is it allowed to move money around before my divorce is final?
A: If you are transferring your own money, you generally can—but proceed cautiously. Such transfers might later appear as attempts to hide or diminish assets before the court can consider them. Always consult your solicitor first, whether you are transferring funds to yourself or directly to your spouse. Any transfer should form part of a documented, overall financial agreement to avoid potential future claims or disputes.
Will spending money before divorce affect my settlement?
Q: Could spending most of my money lower what I owe to my spouse in the settlement?
A: In most cases, no—it is unwise to spend large sums shortly before a divorce. The court may interpret such actions as an attempt to deprive your spouse of a fair share of marital assets. If your spouse suspects you may do this, they can apply for a freezing injunction, preventing you from dealing with your assets in a way that compromises the final settlement.
How can I protect my pension during a divorce?
Q: I have a substantial pension; how do I ensure it remains secure?
A: Seek professional advice from a family law solicitor and, if necessary, enlist a Pensions Actuary or Pensions on Divorce Expert (PODE). They can calculate how much of your pension might be attributable to the marriage and how much could potentially be excluded from the settlement. Accurate valuations are essential for fair negotiations.
Is transferring assets before divorce advisable?
Q: Can I move assets into someone else’s name to keep them out of the divorce?
A: While it is technically possible, courts may interpret this as an attempt to circumvent a fair settlement. In response, the court can adjust any subsequent settlement to compensate your spouse. If it appears you have deliberately hidden or moved assets, you risk penalties, including paying your spouse’s legal costs or receiving a reduced share of remaining assets.
Can I sell my assets before starting divorce proceedings?
Q: If I sell off valuables before filing, can the court still consider them?
A: Yes, and doing so may raise suspicions. Courts could view such actions as an attempt to conceal or diminish your available assets. This suspicion can colour how judges assess your honesty in all further disclosures, potentially impacting the overall outcome.
What happens if I hide assets and the court finds out?
Q: Are there serious repercussions for concealing finances during a divorce?
A: Yes. If discovered, the court has several remedies. They might redistribute other assets to compensate for the hidden or sold asset, or penalise you on legal costs. In extreme cases, hiding assets can be treated as fraud, carrying possible criminal implications such as imprisonment.
Can I use trusts to safeguard money during divorce?
Q: Will placing assets in a trust keep them safe from my spouse’s claims?
A: While trusts are sometimes established for valid reasons, the family court can still scrutinise them. If a trust seems purely designed to prevent fair asset division, the court may treat it with suspicion or effectively disregard it in the settlement. Genuine trusts, created for legitimate purposes and fully disclosed, stand a better chance of being upheld.
HM & Co. Solicitors
186 Lower Road, Surrey Quays
London SE16 2UN
Telephone: 02071128180
Email: info@hmsolicitorsltd.com
Should you have further questions about safeguarding finances or any other divorce-related matter, our experienced solicitors are here to help.
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