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Financial Disclosure – not even Billionaires are safe.

Financial DisclosureDespite being ranked 147th on the Forbes list of billionaires, Russian Dmitry Rybolovlev has not been able to elude the reaches of family law and a Geneva Court has ordered that he pay his former wife $4.9billion as her property settlement entitlements, www.news.com.au reports.

Each person, irrespective of their wealth, power or influence, who is party to property settlement litigation or negotiation is obliged by the Family Law Rules to provide full and frank disclosure of their financial circumstances.  In most cases this is achieved by the exchange of tax returns, pay slips, bank statements and superannuation members benefit statements.

Despite living in 2014, the male spouse is still most commonly in the better financial position with the female spouse having been committed to family responsibilities coupled with often casual or part time work.  It is this reality that leaves women vulnerable to some of the financial manoeuvring husbands do to reduce their “losses” in a property settlement.

Owning a business presents several opportunities for just this kind of manoeuvring.

For example, once the settlement discussions get underway, the business operating spouse might claim that, lo and behold, the business actually has little or no income or value! Despite what has always been the commonly held belief in the family and despite the lifestyle the business has provided to both parties, sudden poverty now conveniently prevents them from providing appropriate levels of support and an appropriate property settlement.

Here are some examples of the games that can be played:-
•    The business is supposedly in trouble, but his lifestyle does not show a loss of income.
•    The business pays personal expenses
•    You hit brick walls when you ask for financial documents or a business valuation.

It can be difficult to prove that someone is under reporting income and/or misrepresenting the value of a business, particularly when the monied spouse has control of all the financial information.

The only way to catch these types of spouses is to analyze the details. It is essential that the income tax returns and relevant financial information (business and personal) are obtained and reviewed as the truth will always be found in the numbers.

Family Lawyers also turn to our professional colleagues such as forensic accountants and business valuers to provide additional expertise in discovering the true financial picture. If you are involved in family law proceedings and are concerned about the current state of the financial disclosure and feel as though you are getting nowhere, please contact the Family Law team at Attwood Marshall Lawyers to discuss your options.  Also if you are considering separating and are concerned about financial mismanagement and being a victim to the games described herein, again contact the Family Law team at Attwood Marshall Lawyers for advice on the best way to protect yourself and your financial future.

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Jeff Garrett

Jeff Garrett

  • Legal Practice Director
  • Direct line: 07 5506 8201
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