What happens if one spouse tries to hide assets during the divorce process?

What happens if one spouse tries to hide assets during the divorce process?

Failing to disclose assets is a serious violation of legal and ethical standards in both British Columbia and Alberta. 

Under both the BC Family Law Act and the Alberta Family Property Act, separating spouses have an obligation to provide full and honest disclosure of their assets and debts. If a spouse is caught hiding assets, the courts have the discretion to impose a range of penalties, including: 

  • Legal fees - courts may require the spouse hiding assets to pay for the other spouse’s legal fees.
  • Unequal Division of Family Property - the court can reassess the division of assets based on accurate disclosure and may award a larger share to the wronged party.
  • Adverse Inference – if a spouse fails to disclose assets, the courts can make assumptions about the value of the undisclosed property based on the available evidence. This is known as drawing an ‘adverse inference’. Essentially, the court will assign a value to the undisclosed asset in favor of the other spouse, which may impact the division of family property. 
  • Contempt of Court - in extreme cases, a spouse may be found in contempt of court, which may result in fines or imprisonment.

Steps for Discovery

If you suspect your spouse is hiding assets, consult with a family lawyer immediately. Various methods like subpoenas, questioning, and forensic accounting can be employed to discover hidden assets.

It's important for both parties to disclose all assets fully and transparently for the legal process to be both fair and efficient. Hiding assets can not only jeopardize your case but also lead to severe legal consequences.