By Martin Hill, Edward Hands and Lewis
I know its December but asset freezing is nothing to do with the weather.
What we have here is the court’s ability to prevent property being transferred away by one spouse so that it does not form part of the overall pot on divorce. It is often a feature of divorce with the very well off who have assets in other countries or are sophisticated investors with property / share portfolios in different countries which can be moved at not much more that the push of a button. For the spouse who may only have sketchy knowledge of the existence of funds and their value they can find themselves severely prejudiced when the disclosure process starts and assets are simply not listed because they have been moved. I have come across cases where it became clear that one of the parties had been preparing his disclosure on divorce for over a year before the parties had even discussed separating. In other words he had planned a divorce for “next year” so as to make it hard for his unaware wife to locate assets which had long gone out of his accounts.
The courts can make orders preventing transfers in advance or putting assets back once transferred but the aggrieved party needs to act quickly and be aware of the cost/benefit of such orders. The risks can be high and careful judgment needs to be exercised as to whether the property can be retrieved. The court can make orders against property abroad or all worldwide assets in appropriate cases. The applicant must give all possible relevant information (including evidence that goes in favour of the other party) and the penalty costs for getting this wrong can be large particularly where third party rights (company and trust assets for example) are going to be affected by the order. This is an area for specialist advice especially as it needs to be done quickly in most cases.
I have also been involved in a case where the husband transferred what was supposed to become the parties mortgage free house to a relative shortly before marriage so as to prevent any claim on it by the soon to be wife if the marriage failed. Because it was mortgage free the transfer was done in minutes by the simple signature on a Land Registry form and the registration of the brother as new owner took place days later. The wife only found out 10 years later when she tried to make a claim on the property as part of the divorce.
The ultimate answer is to know your spouse and the assets, but I do appreciate that for many people the division of roles within any relationship often means that one party becomes the “finance director” and that gives them a lot of potential power on separation. Even finding assets, let alone getting them back can become very difficult unless you have at least a broad idea of the make up of the family financial pot.