Infidelity and lies are common place in many marriages and this has been the cause of a lot of divorces over the years. The Justice Department's 2012-13 annual report figures show that the divorce rate has rocketed by 28% from 39 573 to 50 517 cases. If spouses cheat and lie during the marriage, imagine then what spouses will do during a divorce to protect "their assets".
I find in so many divorces I handle that a spouse hides assets or has been hiding assets for many years in preparation for the divorce. Hiding assets can be a criminal offence and you need to think carefully before you do this.
In terms of our divorce laws, and the applicable marital regime, the estate/s are divided at the time of the divorce – which may be years away from the time that the action for divorce is instituted.
So, how do people hide assets from their spouse?
A spouse collects cash and stashes it away over a period of time. Cash is often hidden in a child's bank account or even in a secret hiding place. Even small, but regular, amounts of R500 – R800 can add up to be serious cash over a few years. The other spouse normally does not have any idea that the cash ever existed.
Money gets transferred from the joint account to another private account in one name only. It is easy to do and only a few spouses and their Divorce Attorneys will ever do a complete search to find hidden money and or bank accounts.
Spouses who travel may create a foreign banking account and either transfer money to this account, or make cash deposits into this foreign account as it is very difficult to trace overseas bank and investments accounts.
Money is systematically transferred to a friend or family member's account. The money may be in a joint account or it may be hidden in the veil of a business entity with the understanding that the assets are transferred back after the divorce.
It may be that a contract is created and backdated to show that a specific asset belongs to the friend or family member, or to ensure that the asset does not form part of the accrual or the joint estate.
If I am close to my boss I may ask them to not promote me or to delay a bonus payment that is due to me. I can even ask my boss or supervisor that a bonus or commission that is now due to me be deferred until after my divorce.
People often have additional retirement plans and or stock options that their spouse is unaware off. When they disclose their assets, they just disclose their main pension fund details or they simply state that they do not have any investments on the Stock Exchange.
People that are self-employed always seem to create "poor performing businesses" the moment they go through a divorce. The value of the business is suddenly non-existent despite the fact that the business has been doing great for many years.
They stop invoicing clients, accept deferred payment plans and have no stock to carry on running the business. They create fake expenses and often buy expensive personal items and they go on exotic holidays only to charge the company for this "business expense".
The Bookkeepers and Accountants – who often are friends with the business owner – value the business at a much lower value.
If you wonder what to do about finding hidden assets, read more about the Discovery Process in an article that will follow shortly.