Asset Tracing in Divorce

What Is Asset Tracing in Divorce?

Asset tracing is the process of identifying, locating, and valuing assets that may be hidden, misrepresented, or transferred in an attempt to avoid fair division during divorce proceedings. It is especially critical in high-net-worth divorces, where complex financial structures and international holdings are common.

Legal Context:
UK divorce law requires full and frank financial disclosure. Concealing assets is not only unethical, it can lead to serious legal consequences, including adverse cost orders and reduced settlements.

Why Is Asset Tracing Necessary?

Tracing ownership matters. This is because, when a court distributes property during a divorce, the first think they will seek to do is to classify the property as either matrimonial or non-matrimonial. The importance is that matrimonial property will be distributed equitably between the spouses, regardless of its ownership. Conversely, non-matrimonial property will be kept entirely separate from the divorce, save for rare ‘needs’ cases. 

Spouses may attempt to hide assets to:

• Avoid equitable distribution
• Lower spousal maintenance or child support
• Retain control over valuable property or businesses
• Conceal financial misconduct (e.g., tax evasion, fraud)

Asset tracing ensures transparency and protects your financial rights. 

The aim is asset tracing is not simply to determine which spouse owned a particular asset, but exactly when they owned it and how much of it that they own. The answers to these questions may initially seem simple, but it is commonplace to uncover ownership morphing through the duration of the marriage, changing the level of interest the spouses have in a particular asset. 

Common Methods of Concealing Assets

• Transferring assets to third parties (e.g., family or friends)
• Creating fictitious debt or inflated liabilities
• Undervaluing businesses or property
• Using offshore accounts or trusts
• Investing in cryptocurrency or shell companies
• Failing to disclose income or bonuses

How Are Hidden Assets Discovered?

Asset tracing typically involves:

• Forensic accountants and financial investigators
• Review of bank statements, tax returns, and corporate filings
• Searches of the Land Registry and Companies House
• Credit report analysis to uncover undisclosed liabilities
• Discovery applications for further disclosure

Legal tools such as Form E, Questionnaires, and Section 37 injunctions may be used to compel disclosure or prevent asset dissipation.

International Asset Tracing

For global families, tracing assets across jurisdictions may involve:

• Mutual legal assistance treaties
• Cross-border disclosure orders
• Collaboration with foreign counsel and investigators

Vardags has extensive experience in international divorce cases involving offshore trusts, foreign real estate, and complex corporate structures.

Need Expert Help?

Vardags’ team of top divorce lawyers delivers a bespoke legal service to HNW and UHNW individuals, their families, and businesses. We are the only HNW family law firm with an in-house Financial Forensics department. Our team specialises in identifying, tracing, valuing, and forensically reviewing assets, including businesses, property, and investments. 

If you are a high-net-worth individual going through or considering a divorce, it is crucial to have an accurate valuation of all your spouse’s assets. Whether these assets are held in complex international trusts, hidden within investment portfolios, or concealed through intricate share structures, they must be identified and considered for a fair settlement. 

If you suspect your spouse is hiding assets, our team of elite divorce lawyers and forensic experts can help you uncover the truth. We offer a free initial consultation to qualifying individuals.

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