30 Jun Is your ex hiding assets? Here are the red flags to look out for
When you’re thinking about separating or divorcing, worries about your assets will naturally arise. This is particularly true if you’re a high-net-worth individual or asset rich. And where trust has already started eroding, it can be easy to suspect your former partner of hiding assets. Sometimes you may even know how your ex acted during a previous separation.
Although family law requires full and frank disclosure of a person’s financial circumstances during a property settlement, there will always be some people who don’t feel that the rules apply to them. Because of that, attempting to hide, or ‘restructure’ assets, is more common than you might think.
Research shows that more than one in four Australians (28%) have lied to or been lied to by a partner about their finances – equivalent to approximately 2.7 million people, with the desire to maintain financial control cited as the key reason. (Notably, men were found to be more than twice as likely to lie about money as women (20% vs 9%).)
So, if you’re worried that your ex is hiding assets, you could be right. Here are some red flags to look for.
Common red flags that your ex might be hiding assets
Red flag #1 – Sudden secretiveness about finances
One of the earliest warning signs is often a sudden shift in your ex’s behaviour around money. Particularly if they were previously open about finances and suddenly become defensive, evasive or unusually controlling whenever financial topics come up. You might also notice things like bank statements disappearing from the mail pile, passwords being changed, or your access to online accounts being restricted.
Sometimes it’s more subtle, like irritation every time you ask about tax returns, superannuation or business income. While, of course, there can be innocent explanations, secrecy around finances during a deteriorating relationship can sometimes suggest your ex is starting to restructure, conceal, or distance themselves from assets before separation formally occurs.
Red flag #2 – Refusing or delaying financial disclosure
Financial disclosure is a key part of any property settlement, but sometimes people who are trying to ‘hide’ assets deliberately drag the process out. Your ex may repeatedly promise documents are ‘coming soon’, only provide partial records or constantly blame accountants, banks or bookkeepers for delays.
Missing tax returns, incomplete bank statements and unexplained gaps in accounts (including business accounts) can all make it harder for you to understand the true financial position. In some cases, delay itself becomes a strategy designed to frustrate negotiations, increase legal costs or even buy time for assets to be moved elsewhere.
Red flag #3 – Unexplained changes in attitude toward joint accounts
A sudden push from your ex to separate finances can sometimes be another warning sign, particularly if it happens without much discussion or explanation. This could look like your ex abruptly transferring money from your joint accounts or opening new accounts in their sole name. They might also cancel your card access or insist that your shared expenses suddenly be handled differently.
Be particularly mindful of moving funds in smaller amounts over time. Sometimes people do this, believing it will attract less attention.
Red flag #4 – A sudden drop in income
Anyone can have a change in income, and a sudden reduction in your ex’s income can sometimes be genuine, but it can also be a red flag – particularly if their lifestyle hasn’t changed to match.
For example, your ex may claim their business is struggling while continuing to go out with friends, bet on the horses or even get that new luxury car they’ve been eyeing off. In business and executive roles, it’s not uncommon for bonuses, commissions or salary increases to be delayed until after settlement is finalised. Sometimes expected financial benefits also mysteriously disappear for a period of time, such as family gifts, trust distributions or inheritances your ex would normally have received.
The issue is often less about the income itself and more about whether the financial picture being presented actually reflects their financial reality.
Red flag #5 – Large or unusual cash withdrawals
Large cash withdrawals or unexplained money transfers are particularly concerning in the lead-up to separation. If you notice your ex regularly withdrawing cash from ATMs, transferring funds to relatives or moving money into overseas accounts, you should take a deeper look. Cash is naturally harder to trace, which is why it often attracts attention during family law disputes.
Sometimes these withdrawals are explained away as repayments, living expenses or business costs, but if there’s little documentation showing where the money actually went, then it could be an indication that your ex is doing the wrong thing.
Red flag #6 – Overpayments on tax debts
Some asset protection strategies are surprisingly creative, and that means they can be surprisingly difficult to detect if you don’t know what to look for. One tactic we’ve seen occasionally is where an ex deliberately overpays tax liabilities, credit cards or other debts before property settlement.
They do this because, on paper, it can make it appear that there’s less cash available to split between the parties. But once the property settlement is finalised, those excess funds are likely to be refunded or become available again.
Be wary if your ex suddenly pays a significantly larger amount than necessary or than usual to the ATO despite previously paying in instalments. Courts and forensic accountants are often aware and clued in on these kinds of arrangements, so if you’re suspicious, get in touch with us, and we can guide you on where to get help.
Red flag #7 – Assets transferred or ‘gifted’ to others
Another common red flag is when your assets suddenly end up in somebody else’s name. Your ex might transfer money to parents, sign over a vehicle to a sibling or move property interests to a friend. I’ve even seen a parent transfer a home into an adult child’s name.
Often, these arrangements are explained as repaying an old debt or helping a family member out financially. Sometimes it’s even to ‘protect it’ when there’s a business involved. Of course, sometimes the transfer is legitimate. But when you’re in the midst of a separation, it could also be an attempt to temporarily remove assets from the property pool while still retaining some level of control or benefit behind the scenes.
Red flag #8 – Fictitious loans or inflated liabilities
Sometimes the issue isn’t assets disappearing, but debts suddenly appearing. Your ex may claim they owe large sums of money to family members, friends, or related companies, despite little (or no) evidence that the loans ever genuinely existed. Fabricated debts work the same way as transferring assets, as they can also reduce the apparent size of the asset pool for splitting. But your ex may be trying to hide the cash to access it post-property settlement.
Warning signs can include vague loan arrangements, missing paperwork, repayments that never occurred or family members suddenly ‘calling in’ debts during separation proceedings. Inflated liabilities can become a major issue in business and farming matters where financial arrangements are often more informal.
Red flag #9 – Underreported business income
This is a tricky one to uncover, particularly if you’re not part of the business regularly. But business structures can create opportunities to falsify income reports through the manipulation of business accounts.
For example, your ex might retain profits within a company, inflate business expenses, delay invoices or reduce the income they take out of the business during settlement negotiations. Your ex might also suddenly report a much lower income, even though the business continues to operate successfully. In some cases, personal expenses may also be run through the business, masking your ex’s true financial position.
Because of the complexity of these matters, it’s a good idea to get a financial expert or forensic accountant in to help.
Red flag #10 – Withholding trust distributions
Family trusts can also be used strategically to benefit one party over another in separation disputes. If your ex regularly received trust distributions, they could try to pause those payments during settlement in order to create the impression that their financial position has changed dramatically or is a lot weaker than you originally thought.
But if this isn’t true – for example, if the trust itself still holds substantial assets or continues supporting your ex indirectly – or your ex understands that the distributions will simply resume once the property settlement has concluded, then this is considered hiding assets.
This is one reason courts often look beyond what’s happening on paper and examine who ultimately controls or benefits from the trust.
What should you do if you suspect your ex is hiding assets?
If you suspect your ex is hiding assets, get in touch with our team immediately. While it’s important not to jump to conclusions, unusual financial behaviour during a separation is worth investigating properly, particularly where there are high-value assets, businesses, trusts or investment properties involved.
It’s important to never try to ‘beat them at their own game’ by trying to hide assets yourself. Full disclosure is legally required, and family law courts take these obligations very seriously. Any attempts to conceal, transfer, hide, or manipulate assets can not only damage your credibility but also negatively impact the outcomes.
It’s also important not to wait – start gathering information and getting advice early. Always keep copies of any and all financial documents, make note of unusual transactions or behaviour changes and speak with an experienced family lawyer as soon as possible. We can also bring in forensic accountants and valuation experts if needed to trace funds, review business structures or assess whether the financial picture your ex is presenting actually reflects reality.
And remember, just because something is in someone else’s name, held in a trust or seems to be part of a business, doesn’t automatically mean it shouldn’t be (and won’t be) part of the asset pool. In family law, the focus is less about what things look like on paper, and more about who really controls, benefits from or has access to the asset in practice.
Do you need support managing a property settlement or protecting your rights during divorce? As family law and divorce specialists, Toomey Family Law can help. Get in touch today.