In Alberta, the parties to a family law proceeding are required to disclose all relevant financial information necessary to help a court properly determine the appropriate amount of spousal or child support, as well as a fair and equitable division of assets. Suppose a party fails to provide full disclosure as requested or provides inaccurate information as part of their disclosure. In that case, the court may impose financial penalties or order that the person pays additional costs associated with the litigation. 

When a person suspects their former spouse of hiding or disposing of assets or underreporting income, there are certain steps they can take to help. However, it is vital to take these steps as soon as possible. The sooner this process is started, the easier the assets will be to track, and in some cases, the court may be able to assist in preventing assets from being disposed of. 

Below, we will examine the basics of financial disclosure in a divorce proceeding and options available to parties who suspect their former spouse or partner is not being honest about their financial status. 

What Kind of Information is Typically Provided as Part of the Disclosure Process?

One of the first things a family lawyer will ask their client to do to prepare for divorce proceedings will be to provide a complete picture of their financial assets and liabilities. Once the information is gathered, the parties will exchange information to assist with the calculation of support and property division. The information requested and provided may differ based on the specific circumstances of the parties; however, in most family proceedings, parties can expect to provide details such as: 

  • Tax returns and Notices of Assessment for the three most recent years
  • Records of salary, including overtime, from one’s employer for the prior most recent year, if applicable
  • Records of other sources of income, including social assistance payments, pension, rental income, and investment dividends
  • For self-employed persons, people in partnerships, or those who are part owners of an incorporated business:
    • Confirmation of all income for the past three years
    • Financial statements pertaining to the business
    • Records of shareholder loans or transactions, if applicable
  • A sworn and detailed list of all assets, liabilities, expenses, and income 

Assets include real property, vehicles, investments, and business interests. Liabilities may include mortgages, lines of credit, bank loans, and credit card debt. 

What Constitutes a Failure to Disclose?

People may conceal or hide assets in a number of ways in order to avoid their obligation to share in the asset’s value or to impact the calculation of their support responsibilities. When it comes to physical property, such as real estate or vehicles, they may temporarily attempt to transfer the property to other people, so the property will not be included in their assets. Sometimes, a person may even dispose of cash by making large loans or gifts to close friends or family, which can be recalled later. 

With respect to income, they may attempt to underreport the amount they earn to reduce their support obligations. This can be especially easy to do when a person owns their own business or is able to accept cash as payment in exchange for services. Business owners may also attempt to transfer some or all of their interests in a corporation to other parties.

Hiring an Expert to Find Hidden Assets: What You Need to Know

Experienced family lawyers can help identify potential areas for concern regarding financial disclosure. They will often prioritize fully accounting the family’s assets and liabilities to identify potential areas of concern so they can take action if necessary. Suppose a spouse or their lawyer has reason to suspect the other party may be looking to dispose of, or otherwise shelter, certain assets. In that case, they may be able to obtain an injunction from the court to freeze the assets until the proceedings have ended. Identifying assets can be much more complicated once they have already been disposed of, so time is of the essence.

When a party suspects that assets have already been hidden, or their spouse is significantly undervaluing a business or their personal income, they can also retain a forensic accountant to help. Forensic accountants can track assets, gather evidence of underreported income, and otherwise help clients demonstrate that their former spouse has been dishonest about their financial situation. They will commonly conduct an investigation which may include:

  • Investigating significant bank transfers
  • Looking at the person’s lifestyle compared to their reported income to identify disparities
  • Reviewing business transactions and sales
  • Comparing the profits of a company owned by the spouse with their reported salary, to determine whether additional income should be imputed to them

It should be noted that retaining a professional forensic accountant can be extremely costly, depending on the amount of work involved in the investigation. In some cases, retaining an outside expert could end up costing tens of thousands of dollars. For this reason, they are most frequently engaged in situations where there are significant assets in question. However, if the expert can demonstrate fraud or dishonesty on the spouse’s part, the spouse will often be ordered to cover some or all of the costs incurred. 

Mincher Koeman Family Lawyers in Calgary Will Ensure You’re on Equal Footing in Your Family Dispute

At Mincher Koeman, we bring unique experience and organizational skills to assist clients facing the financial dishonesty of a former spouse. Our goal is to quickly identify, locate, and value assets that will affect the division of property, or the determination of child and/or spousal support, to ensure fairness in every case for our clients. We are committed to providing impeccable service and delivering high-quality work and results efficiently and responsively. Please contact our office to make an appointment to discuss your matter with one of our family lawyers today by calling us at 403-910-3000 or by contacting us online.

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707 7 Ave SW #1300,
Calgary, AB T2P 3H6

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Canmore, AB T1W 2A2

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