How Do Courts Find Hidden Assets in a Divorce

Relationship dynamics and varying financial responsibilities during the relationship can create an information imbalance that comes to light when a separation occurs. The breakdown of a relationship can also prompt the party with control over financial assets to move or hide funds in attempts to shield them from division of family property.

Whether you are common-law partners or a married couple, spouses have a mutual obligation for full financial disclosure. This obligation is recognized in both the Divorce Act and Alberta Family Property Act and has been further confirmed by the Alberta Court. Full financial disclosure is the foundation for ensuring a fair division of assets and liabilities. It is also a precursor to ensuring fair negotiations and informed decision-making with regard to the division of family property.

However, sometimes a spouse hides or conceals assets in attempts to shield them from property division. The first step is to gather whatever disclosure you can, which can be compelled through the court if not provided on a voluntary basis. If disclosure is not being provided voluntarily, then you may need to obtain a disclosure order and even question your ex-spouse to obtain evidence relating to the hidden asset. You may also be able to gather evidence from the disclosure that has been provided to identify any untraceable transfers and potentially trace funds to the hidden asset.

If a spouse is found to have hidden assets, then under the Alberta Family Property Act the Court may correct the inequality that was created by concealing the asset by either ordering that the property be returned to the spouse, ordering an unequal division of family property or attributing the value of the asset to the spouse as if they retained the asset. Further, if it is found that a spouse failed to disclose certain assets were hidden prior to entering into a family property agreement then that agreement may be set aside.

If you suspect your spouse is hiding financial assets, please reach out to the Hayher Lee team to discuss what steps you can take to identify hidden assets and compel disclosure.