Financial hide and seek
Service Area: Divorce and Matrimonial Matters
Member: Roger Isaacs
Roger Isaacs, Forensic Partner at Milsted Langdon, was quoted in The Times recently discussing the potential pitfalls of shared finances and how this can lead to ‘financial abuse’ or other situations where financial knots need untangling.
This includes situations ranging from having a joint bank account where one party is siphoning off funds, to a person controlling their partner’s access to financial resources or hiding assets from them.
In the case of divorce, one of the partners might be trying to hide money so that they pay less in the financial settlement. This could be in the form of cashing in investments or being paid for work in cash. Often this involves colluding with friends or business partners but, however it is done, it can be ruinous for the spouse who is left in the dark.
The potential complexity of demonstrating a former spouse’s actual income or identifying how much they have siphoned from joint finances means that a forensic accountant will often be brought in to determine what has actually happened.
Roger Isaacs said: “A party to a divorce who is suspicious about the financial conduct of the other party should usually raise these concerns with his or her solicitor in the first instance.
“Perhaps they suspect that their husband or wife is cashing in savings or being paid dividends into another account. If they believe this to be likely, they can ask the court to consider the information and, if appropriate the court has the power to order that a forensic accountant is jointly appointed.
“The benefit of this is that the accountant is completely independent and owes a duty to the court rather than to either of the parties. The appointment of a so-called single joint expert also helps to keep costs to a minimum and avoids each party having to pay for his or her own accountant”.
Author: Roger Isaacs
4 September 2020