Can You Hide Assets in a Divorce or De Facto Property Settlement?

Behind the question “Can you hide assets in a divorce?” is typically a significant fear of losing hard earned wealth, in the lead up to the end of a relationship, upon separation or when an amicable separation takes a turn for the worse.

This pondering can be triggered further when there is an awareness that the property settlement process may significantly impact a business and/or broader family investments.

This page is dedicated to helping you understand how assets are treated in a separation or divorce in Australia, the consequences of any hidden assets or false information being discovered, either during the property settlement process or after the financial settlement is formalised by the Court.

If instead you have concerns about whether your partner or spouse is hiding assets, go to this page to identify the ways in which people try to hide assets to be aware of.

Here we will answer the questions:

• Can you hide assets in a divorce?
• Is there a penalty for hiding assets in divorce in Australia?
• If discovered, what are the consequences of hiding assets in divorce?

We will also explain the alternatives to hiding assets and options that may be available to you to minimise the risks at different stages of a relationship.

This page is written with you in mind if you:

• Are considering hiding assets yourself
• Are a family member or business partner who has a vested interest in the outcome of a property settlement
• Are any of the above and wondering how you can protect your interests

Can You Hide Assets in a Divorce or De Facto Separation?

It is unlikely that you will be able to hide assets in a divorce or de facto financial settlement. This is because of the legal obligation to disclose all assets and liabilities in a process known as financial disclosure. 

If you want to find ways to minimise the impact of losing assets in separation or divorce, we will cover the alternatives that can help quarantine assets further down. For now though, it is important to understand how any attempts to hide assets can be discovered.

Financial Disclosure in De Facto Separation & Divorce

In the financial disclosure process, there is a requirement for both parties to each provide information such as (but not limited to), the following:

1. Evidence of personal income (3 most recent payslips)
2. Personal & joint bank statements
3. Superannuation statements (if self-managed, trust deeds and financial statements from last 3 years required)
4. Business Profile & Loss Statements (for last 3 financial years)
5. Business bank statements (including trusts & company)
6. Trust deeds
7. Documentation of any assets sold or disposed of in the 12 months before the date of separation
8. Documentation of any inheritances or gifts from family members
9. Documents of any other windfalls or assets that either party has received (up to and including until the date of settlement is reached)

If your former partner or spouse has any inkling that money has been hidden, assets temporarily “gifted” or missing, or questionable transfers of funds, 

subpoenas may be sought to find information that you have not provided. And, it is not uncommon for a forensic accountant to independently review the documentation where there are concerns of hiding assets or providing false information.

The consequences of getting caught can be significant and far-reaching.

For more on financial disclosure, visit this page: What is financial disclosure in separation & divorce?

Consequences of Hiding Assets in Divorce

The possible consequences of hiding assets in divorce or a de facto property settlement, may include, but are not limited to, the following:

• Penalties including fines, & in rare cases, imprisonment;
• Other party being awarded by way of settlement more of the existing pool on the basis that assets have been hidden by the other party;
• Any existing Property Settlement/Financial Agreement to be set aside by the Court; & subsequently:
• The financial disclosure process to start over again.
• Costs orders – the person responsible for false information may be ordered to pay the costs associated with revisiting the process, including costs involved for the other party.

…Not to mention the added time and stress and how this non-disclosure could influence any other matters you have before the Court, such as parenting matters, as the Court will form a perception of that person and their credibility.

Instead of temporarily parking assets with other people with the objective of getting them back later, or funnelling funds or hiding assets in any other way, it is far wiser to seek legal advice, outline your goals and have a strategy in place that takes into consideration all of the obligations relating to Family Law.