Absconding Funds in Family Law: Hidden Assets and Full Disclosure

When couples separate or divorce, one of the most important steps in the financial process is ensuring that both parties are on a level playing field. In Family law, there is a duty on each person to be open and honest about their financial position, and when one spouse has secretly hidden away funds, it can have serious legal consequences.  

We recently came across a situation where there was a concern that the wife had been ‘absconding funds’. In this blog post, we will explore what happens when someone ‘absconds’ with funds during a marriage, why full and frank disclosure is so vital, and how the court deals with hidden assets.  

What Do We Mean by ‘Absconding Funds’?  

In family law, we sometimes see situations where one party has secretly diverted funds during the marriage, perhaps siphoning money into a separate bank account, purchasing assets in another name, or even moving money overseas, with the intention of keeping it out of reach if the relationship ends.  

This could look like:  

• Secret savings accounts where salary or bonuses are paid.  

• Investments or crypto wallets that one party doesn’t disclose.  

• Cash withdrawals or transfers to friends or family to ‘hold’ on their behalf.  

• Undervalued businesses or hidden shares that don’t appear in the financial disclosure.  

While it might seem clever at the time, failing to declare these assets can lead to significant legal trouble down the line.  

The Duty of Full and Frank Disclosure  

In financial remedy proceedings, both parties are required to give ‘full and frank disclosure’ of their financial circumstances. This is usually done by completing a Form E, which is a comprehensive document setting out income, assets, pensions, liabilities and other financial resources.  

A Form E is not just a formality; it is signed with a statement of truth and forms the foundation of any fair financial settlement. If one party withholds information or fails to disclose assets, it undermines the entire process.  

Consequences of Hiding Assets 

If it later emerges that one party has hidden assets, the court can take robust action. Settlements made on an unfair basis can be reopened. Judges may also draw adverse inferences, assuming the hidden funds are significant, and adjust the division of assets accordingly.  

The dishonest party can face further consequences, including being ordered to pay the other side’s legal costs. In the most serious cases, the court can make enforcement orders to protect or recover the missing money. 

How the Court Tried to Find Hidden Assets  

The court has several tools available to get to the bottom of suspected non-disclosure. These include ordering further bank statements and financial records, compelling answers to questions raised in a Questionnaire following the Form E and appointing forensic accountants to trace missing money. In urgent situations, the court can even freeze assets to stop them from being moved or dissipated.  

Why Transparency Matters  

Trying to outsmart the process rarely works and often backfires. Full and frank disclosure is not simply a legal requirement; it is the only way to reach a fair and lasting settlement. Hiding assets usually leads to more expense, more delay and often a worse outcome for the person who was not honest.  

If you suspect your spouse has hidden funds, or if you are unsure about what you need to disclose, it is important to seek legal advice early. A fair financial settlement depends on both parties being transparent from the outset. Addressing concerns promptly can help avoid lengthy disputes and allow everyone to move forward with clarity and confidence.  

The starting point in all cases is 50/50, but in a lot of cases, it needs to be established what the matrimonial pot is to achieve a fair outcome. 50% might not necessarily be the end point because you might be able to demonstrate that you ‘need’ more for your housing, health, minor children, mortgage capacities, differences in income, the length of the marriage and so on.  

At Maguire Family Law, we have extensive experience dealing with Form E disclosure and complex financial remedy proceedings. Our team works carefully through financial documents such as bank statements and business accounts, raise the right questions, and ensures the court has a full and accurate picture before decisions are made. Our goal is to help you achieve a settlement that is fair and protects your long-term financial security.