I am worried my spouse will give away assets what can I do?
It can be a real worry on divorce if the majority, or all, of the family assets are controlled by your spouse. You might worry about them giving assets away, selling them at an undervalue or moving them out of the jurisdiction.
Section 37 Matrimonial Causes act 1973 is a powerful weapon if any of these scenarios should occur.
Setting aside transactions and freezing injunctions
Section 37 gives the court the power to set aside a transaction (un-do it) if it is satisfied that that transaction was made with the intention of defeating the other party’s financial claim on divorce. If the disposition has taken place within the last 3 years and the consequence would be to defeat the financial claim, then the intention is presumed and it is for the other party to show why that was not the case.
The court also has the power under this section to make “freezing orders” which prevent one party from dealing with certain assets until the financial issues on divorce have been resolved. It is also possible in certain circumstances to have a more wide-ranging freezing order.
The general principle is that the court will only protect assets up to the maximum value of your financial claim- and so not 100% of the total assets. This can sometimes be a difficult calculation if you do not know the total extent of the assets and one which requires the input of a family law solicitor.
The need for speed
The key with these types of applications is to act quickly. Sometimes once monies have moved out of the jurisdiction, for example, it may well be difficult to get it back.
It is always better in these circumstances to be proactive rather than reactive.
Often, if there is cause for concern, the first step will be to write to the other party and/ or their solicitors to ask for further information and an undertaking (formal promise) not to do certain things and/ or for monies to be held to the joint order of the parties. If they will not do this this may strengthen any application under section 37 (above) and make the court more inclined to order that they pay the costs of that application.
Having said that, in some circumstances this may do more damage than good as you may “tip-off” the other party about a potential application and they make take the exact action you were hoping to prevent. Careful consideration therefore needs to be given.
What if they just won’t stop spending?
Section 37, whilst useful, is not always helpful where rather than transferring or disposing of large sums one party is just over-spending on a day-to-day basis.
It is possible, however, to argue that as part of any financial settlement these monies should be “added back” as notional cash which that person still has access to. The general test is whether the court considers that the spending is “reckless or wanton”.
If you are worried about any of the above issues, then you should take advice as soon as possible from one of our specialist divorce and finance solicitors.
