When a marriage ends, former couples need to work toward a resolution regarding their joint assets and liabilities. One of the things that can make this process difficult, particularly in a high-asset divorce, is when one party attempts to hide assets. This can have serious legal, emotional and financial consequences, so many Alberta individuals going through a divorce are rightly on the lookout for signs that their spouse might have hidden assets. But what signs should they be looking for, exactly?
This article examines the legal consequences of hiding assets in an Alberta divorce and outlines the key signs that may indicate a spouse is attempting to conceal money or property.
The Duty of Full Financial Disclosure in a Divorce
Under the Family Law Act and the Divorce Act, both parties to a separation or divorce in Alberta have a legal obligation to provide honest disclosure about their financial situation, including all their assets, income, and liabilities. This full disclosure is essential to ensure fairness throughout the divorce process.
Required financial documents typically include income tax returns, notices of assessment or reassessment for the past three years, recent pay stubs or employer statements, and records of any government benefits or student funding. Additional financial disclosures include credit card and bank statements, RRSPs, pensions, investments, a monthly budget if spousal support is sought, an itemized list of all assets and debts, and any extraordinary child support expenses or trust interests.
Consequences of Hiding Assets in a Divorce
In divorce proceedings, failing to disclose relevant financial information or deliberately concealing assets can result in serious legal consequences. A court may assign a larger portion of hidden assets in divorce to the other spouse, adjust support payments based on estimated or imputed income, impose financial penalties, or order an unequal property division. Dishonesty in financial reporting also undermines credibility and can significantly affect a fair division of property.
Signs That Someone May Be Hiding Assets in a Divorce
One sign that a spouse may be hiding assets is making overpayments to creditors or paying more taxes than necessary. It is possible that someone may purposely overpay the Canada Revenue Agency or a creditor in hopes of getting a refund of the extra amount after the divorce is finalized. If money is taken out of accounts for bills, ask to see the bill to confirm that the amounts match up.
Suspicious purchases are another red flag, such as investing in art or antiques. It is possible for a spouse to purchase a very valuable piece of art and claim that it is a thrifty garage sale find. If a spouse begins purchasing such items as a marriage is coming to an end, it is worth investigating their real value.
There are several other red flags, such as an interest in cryptocurrency, disappearing account statements, or any unusual financial activity.
How Kirk Montoute Dawson Supports Couples with Financial Disclosure in High-Asset Divorces
In a high-asset divorce, it is important to be aware of any moves that seem suspicious. A trusted Alberta family lawyer can help you navigate these concerns. The family lawyers at Kirk Montoute Dawson LLP can help you identify all relevant financial information, ensure compliance with legal obligations, and address any concerns about concealed assets. With clear guidance and practical strategies, we help clients navigate the divorce process with confidence and achieve a fair property division.