What Are Hidden Assets? – Expert hidden assets solicitors
Individuals may decide to hide assets for different reasons, including in divorce, in criminal cases and when facing insolvency. We take a look at why assets are hidden, how they are hidden and how divorce and criminal lawyers can trace them.
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What Are Hidden Assets?
Hidden assets are items of value that an individual has attempted to put where they cannot be traced. This could be:
- Property, to include overseas property
- Insurance policies
- Valuable items such as cars, jewellery or art
When someone is going through a divorce or insolvency and they fail to fully disclose assets, these are referred to as hidden assets. The court will penalise those hiding assets.
Where hidden assets come to light after the court has dealt with an issue such as a financial settlement in divorce, the matter can be reopened and a new order made.
When And How Do People Usually Hide Assets?
People may choose to try and hide assets if they are facing a divorce to prevent the assets from being taken into account when a financial settlement is made.
Criminals and those accused of criminal conduct may also attempt to hide assets to prevent them from being frozen during an investigation or seized under a proceeds of crime order. They may also attempt to hide assets to avoid paying tax.
Individuals facing insolvency may try to hide assets from creditors and administrators.
Property and cash may be put into trusts, including offshore trusts, while tangible assets may be stored where the individual believes they will not be found. Companies may also be used to hide and move assets.
In some cases, those trying to hide assets use a combination of accounts, companies, trusts and property to try to cover their tracks as well as moving money more than once to increase confusion. Third parties can also be used to hold assets for the direction of legal proceedings.
How Do Divorce And Criminal Lawyers Find These Hidden Assets?
Solicitors can take steps to locate assets so that they can be dealt with legally, for example, included in matrimonial finances on a divorce or used by an insolvency practitioner to reimburse creditors.
There are a wide range of tactics and checks that can be used to look for assets, including looking at records in the public domain, such as:
- Company accounts
- Company directorships
- Property transactions
- Credit reports
- Vehicle ownership
Solicitors also use asset-tracing services to uncover information such as:
- Use of different names
- Searches of company records
- Searches of property ownership records
- Assets owned by businesses
Solicitors are also able to ask the court to make orders requiring an individual to disclose information, to include:
- An order for disclosure, requiring details of assets to be provided
- An order for non-party disclosure, enabling a solicitor to obtain information from other sources, such as banks, employers, accountants, new partners and HM Revenue & Customs
- A search order, sometimes granted if there is believed to be a risk that documents and other evidence will be destroyed
- An avoidance of disposition order, allowing the value of assets that have been moved or sold to be included in calculations such calculations in a divorce settlement
- An order adding back the value of assets spent by an individual to the value of matrimonial assets, so that this sum can be included when the size of the settlement is considered
- A freezing order to prevent assets from being moved
Where necessary, other experts can be engaged, such as investigation agents, asset tracing agencies and forensic accountants.
Locating hidden assets can mean that a divorce settlement is considerably larger than it might otherwise have been or that creditors are able to recover money they are owed, rather than having to write off a debt.
How Do The Courts Deal With Hidden Assets?
The courts can be asked to make orders allowing hidden assets to be discovered, including orders detailing exactly what is to be disclosed. Where individuals fail to comply, they can be held in contempt and penalised.
As well as penalties for being in contempt of court, the individual at fault may be required to pay the other side’s legal costs and receive a reduced award in any final judgment.
Where there is evidence that assets have existed but have not been located, it is also open to the court to draw an adverse inference from the situation. For example, where an individual has been living a lavish lifestyle but claims to have no money, the court can draw the inference that more financial resources exist than have been disclosed. It can then make an order that takes this into account.
Should I Investigate Hidden Assets?
While it may be tempting to try and locate assets yourself if you believe that they have been hidden, it is generally recommended that you ask professionals to deal with this. There is a risk that you could alert the person involved so that assets are moved and hidden more securely and there is also a chance you could inadvertently do something which is not legal. This would mean that as well as breaking the law, the information you obtain would not be included by the court when it considers your case.
By engaging a solicitor to find hidden assets, you can be sure that discovery will be legal and the information that comes to light can be used in court to support your case. The courts take a dim view of hiding assets and will generally take steps to ensure that assets that someone has attempted to secrete are taken into account when judgments are made.