Hidden assets in family break-up
A Sydney international airline pilot's weekly overseas trips and high-flying lifestyle gave him the perfect opportunity to siphon money out of a joint family bank account without his wife's knowledge and stash it in foreign banks. So when the 43-year-old pilot decided to leave his wife and three children (aged between 9 and 20) recently, he had already built up a healthy bank balance overseas, particularly in the United States.
The pilot - who had cash, assets and superannuation totalling about $700,000 - had secretly made the deposits in foreign banks over many years and when his marriage finally broke down his wife did not know how much he was really worth. And in another marital deception, a 56-year-old physiotherapist from Sydney's southern suburbs, facing divorce proceedings, was caught trying to deceive his estranged wife into thinking his practice was worth much less than its real value. But the physiotherapist was exposed when the wife's solicitor hired a private detective to pose as a customer and visit the husband's practice for some back rubs. The private detective paid for the treatment in cash but the consultations mysteriously did not appear in the husband's official company records.
The trial judge decided the husband was trying to conceal his true income and gave him less than 10 per cent of the family home. These two examples demonstrate how the breakdown of a marriage often brings out the worst in human behaviour and one of the partners may resort to deliberately hiding assets or misleading the other about their true financial position. Dubbed the "Mushroom Syndrome" because of the plan by one partner to keep the other in the dark, the deception can range from a few thousand dollars to many hundreds of thousands of dollars diverted to a blind trust outside Australia.
The Family Law Act requires full and frank disclosure of the financial affairs of both partners who have to swear an oath and set out a complete statement of income, expenses, assets, financial resources and liabilities. Of course, some people lie on oath and in these cases it is best to get professional help from an experienced family lawyer in a bid to unravel any deception. The court in recent years has been very harsh on people who have not fully and frankly disclosed their proper financial position. The partner has usually gathered a wealth of information over the years of marriage but does not realise how valuable it is. For example, a wife may have heard her husband make a passing reference about a northern beaches property to a business partner over drinks at a party.
All these are leads that an experienced lawyer can pursue by searching public records at the Land Titles Office and the Australian Securities Commission. The family lawyer may quiz you on all you know about your partner's financial affairs, hire an investigative accountant to probe more deeply into the figures, issue a subpoena to test the sworn statement of the partner or demand production of all relevant financial records in your partner's possession so they can be inspected. If the partner who does not have control over the purse strings realises the marriage is over, they are in a perfect position to photocopy documents that relate to money matters such as share certificates, bank statements or financial statements of family businesses. One of the best sources of information often comes from banks which have taken a statement of assets and liabilities for a loan application.
These applications often reveal assets of partner may not have mentioned and asset values which outweigh those in court documents. Most Family Court judges know there is a tendency to overstate their financial position when trying to borrow money but sometimes the distortions in a loan application are closer to the truth than those contained in court documents. If you believe there are hidden assets in your family break up contact a specialist family lawyer.