However, when making these vows, do most couples have a strong understanding of their partner’s financial circumstances? Throughout their marriage will they know how “rich or poor” their partner is and how much money, if any, they have squired away for a rainy day?
Recent research by YouGov shows that actually the number of people in a long term relationship that are keeping their finances separate is increasing and that as many as 1 in 8 hide savings accounts from their long term partners. Whilst others are aware that their partner has a separate savings account many do not have any idea how much is sitting in that account.
The research looks into reasons why couples choose to keep some or all of their finances separate. Common reasons include a belief that it is part of a healthy relationship to have separate funds and a desire to be able to pay for a treat or make a more expensive purchase without consulting their partner. Another common reason put forward was the wish to be financially independent in the event of a separation with 13% of men and 22% of women giving this as a reason. A lack of trust that a partner will use the money responsibly or that they do not agree with the way their partner spends money was also cited as motives for keeping finances separate.
It is therefore not surprising that in divorce proceedings many people do not have a full understanding of their former partner’s financial circumstances. Often there is, understandably, a huge amount of suspicion surrounding the information (or lack of) that is provided. It is, of course, of the utmost importance that before a settlement is negotiated both parties have a full picture of their spouses financial circumstances, including details of any savings and investments even if they have been accrued separately.
In negotiations for a financial settlement as part of divorce proceedings both parties are under a duty to be open and honest with the financial disclosure they provide. Despite this there are of course times when information is being hidden and not disclosed. Sometimes assets are deliberately transferred into the name of another family member, other times complex financial arrangements are designed to mask who really owns the asset but more commonly people simply choose not to disclose that they have a bank account or other asset. How then should someone proceed if they believe there has not been full and frank disclosure from their spouse?
The Family Court has powers to direct parties to provide specific information although they have to be mindful of the reasons one party believes the other party’s financial information is lacking and they need to consider the proportionality of the costs and time that would be needed to collate the information. The Court will not allow one party to go on a fishing expedition looking for potentially hidden assets unless there are good reasons to suspect that one party has not been honest with the information that has been provided.
If the information is still not provided there may be cost consequences for the party that has failed to provide the information and inferences may be made. Further, in extreme cases, if the Court determines that one party has deliberately mislead the Court and/or breached Court Orders, they can hold them in contempt of court, which could punishable by fines, orders to undertake unpaid or even work imprisonment.
If a settlement is negotiated and it is later discovered that one party mislead the other about their financial circumstances, the Court can set the settlement aside if they believe having the information that was not disclosed would have made a material difference.
If you are concerned that your former spouse has kept a secret account or failed to disclose full details of his financial circumstances then please speak to a member of the team regarding any of the issues raised in this article, or any other family law matter please feel free to contact: Chris Burns, who is the head of our family law department; Sophie Arrowsmith a member of our team in the Leeds office Richard Buckley who is a member of the team in the Sheffield office or Andrew Smith who is a member of our York office.
Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.