As we have mentioned in our blog posts many times before, reaching a financial settlement can often be one of the most difficult parts of the divorce process.
Coming to an agreement, for example, about how, or if, the family home will be split and what arrangements will take place with regards to pension sharing (if indeed this takes place at all), can cause a great degree of stress and uncertainty for both parties.
But what happens if your spouse has transferred assets over to a family member, either before or during your divorce? We take a closer look at the possible implications…
In short, yes, it is possible that assets which have been transferred to a family member could be included in the financial settlement.
As part of a divorce settlement, it is necessary for both spouses to fully disclose their assets.
The family courts can, under the Matrimonial Causes Act 1973, review the transfer (or disposition) unless “it was made for valuable consideration (other than marriage) to a person who, at the time of the disposition, acted in relation to it in good faith and without notice of any intention on the part of the other party to defeat the applicant’s claim for financial relief”.
In the end, the courts can, unless these criteria are satisfied, choose to set aside the transfer.
This is a very complex area of law, so expert legal advice tailored to your individual circumstances is highly recommended.
If you are concerned that your spouse is about to transfer assets to a family member (or any other third party), then it is essential to seek legal advice as soon as possible. In this situation, it could be necessary to ask a court to prevent the transfer taking place.
It is essential to act quickly in this situation, as it may be more difficult to transfer assets back, than to prevent them being transferred in the first place.
We mentioned above the necessity for both parties to fully disclose their assets as part of a financial settlement. Not fully disclosing assets on a Form E could result in criminal proceedings being brought against the party in question.
Penalties can be severe for those who are found to have hidden assets. Hiding assets could result in a less favourable financial settlement for the spouse who is found to have done this or they could even have to pay their spouse’s legal costs.
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