They lie, hide and even spend extravagantly, all because they do not want their money to fall into the hands of their estranged spouses.
While many divorcing couples often resort to various creative tricks to prevent their assets from being shared, their efforts are usually in vain because it is hard to erase the paper trail of bank transfers and corporate transactions.
Indeed, some spouses go to the extent of hiring financial forensic sleuths to hunt down the assets of the errant parties and, once exposed, the court will rule that the stash be added to the pool for sharing.
Those found to have deliberately misled the court will usually face a penalty of sorts because the court can increase the share of the other spouse.
Here are three cases involving spouses who tried to reduce the matrimonial assets and how the High Court resolved the dispute.
A wealthy foreign businessman tried to stonewall a divorce proceeding by repeatedly defying the court’s orders to disclose his assets.
He simply refused to budge and was only willing to say he had only about $12,000 in his bank accounts. His antics were so outrageous that the judge expressed contempt for his behaviour, noting that it was “seemingly without equal” in Singapore courts.
The 39-year-old entrepreneur claimed that he was self-employed and earning just $7,500 a month but did not produce any documents to back this up, contending that he had not filed a tax return since 2020.
But it was his 38-year-old former wife who had the last laugh after she produced business registration data to show that the man had, at the very least, a $10 million stake in an overseas business.
As the man had made only bare denials without any proof, the entire $10 million was up for division, which resulted in the wife being given about $7 million.
The court noted that the man had hidden almost the entirety of his assets over the years in order to do his best to “shoehorn the court from being able to sensibly dispense justice”. So it was appropriate to give the wife more because couples should live up to the mantra to be honest with each other in marriage and in divorce as well.
A woman was determined to prevent her spouse from getting a share of her large stash of savings, so she transferred huge sums to her relatives around a year before the marriage ended.
She claimed that she had borrowed large sums from her relatives and was now paying them back with a transfer of $440,000 to her brother, $210,000 to her sister and $162,000 to her father. She produced bank records for these transfers and statements from her relatives who supported her claim that the funds belonged to them.
Another $445,000 was moved elsewhere, but there was no document to show how this sum was used.
When the case went before the Appellate Division of the High Court, the whole sum of about $1.26 million was added back to the matrimonial pool because the woman could not prove that she was repaying loans to relatives.
The relatives could only make bare claims that the funds were theirs. They could not produce evidence, such as bank records, showing conclusively that they had such sums in their accounts before the couple’s marriage hit the rocks.
What this means is that fake deals rarely withstand scrutiny because the parties cannot show the initial transfer and deposit of funds to the supposed borrowers.
Some divorcing couples think the best way to deprive their former spouses of more money is to splurge on themselves first, such as a man who went for a $32,000 hair transplant shortly before the split.
In addition to that costly patch-up work, he also spent about $8,700 to fix his teeth, over $30,000 for knee surgery and another $4,000 for physiotherapy as well as treatment for sports-related injuries.
But such antics will usually backfire and prove costly if the court finds that the expenses are not routine living costs and adds the amount spent back to the matrimonial pool for sharing.
The total amount of $74,700 that the man spent on himself in this case was deemed as his personal expenses that would come out of his pocket. This meant that his former wife would be given a percentage of this sum.
So it is better to be more upfront about your finances in a dispute because you could end up losing more if your ploy fails.
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Source : https://www.straitstimes.com/business/invest/why-its-hard-to-hide-money-from-ex-spouses
