Insight

Uncovering hidden assets in family law disputes

By:
Kelly Rigby,
Darryn Hockley,
Jovita Wong
15 May 20233 min read
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Contents

What is asset tracing?

Asset tracing is a process whereby forensic accountants and investigators ‘follow the money’ by locating assets of value to an individual or company that have been hidden or misappropriated.

How is asset tracing useful in family law and commercial disputes?

When there is commingling of assets, as often seen in family law or commercial disputes, it can become difficult to identify asset ownership and asset value. In these instances, asset tracing is used to determine the source of the asset and how the asset has been used prior, and in the course of the dispute. Asset tracing can also reveal hidden assets, undervalued assets, or undisclosed sources of income.

For example, in the event of a divorce/separation with commingled assets, there is additional complexity in classifying the asset as a matrimonial asset (owned by one or both spouses or where an equitable interest exists) or a third-party asset (where the parties have no equitable claim). 

Asset tracing can help to classify and separate the components of the asset by determining what assets were:

  • Acquired during the relationship;
  • Acquired prior to relationship;
  • Acquired post separation;
  • Disposed of during the relationship;
  • Disposed of post separation;
  • By nature a gift, inheritance or bequest;
  • The source of the funds used to acquire the asset(s); and
  • Analysing the nature of all expenditure during the relevant period.

If separate property has been commingled (or mixed) with marital/community property, a tracing analysis may be necessary to track the separate components of the asset over the period of the relationship or the time since the asset was received. 
There are various complex apportionment and priority rules that can be applied to trace assets in a family law matter or commercial dispute, including:

The tracing method adopted is largely dependent on the extent and completeness of the information available. 

So, what does this all mean?

Understanding the origin of assets in litigation disputes can be extremely difficult, and failure to appropriately trace assets could impact a settlement significantly. We’ve provided expert opinions in a number of family law and commercial disputes and combining that knowledge with our asset tracing experience means reliable advice and a more accurate outcome. 

Contact our team of experts today for advice on asset tracing in family law and commercial disputes. 

TAGS
Authors
  • Kelly Rigby
    Kelly Rigby Kelly works closely with senior executives, boards and their legal counsel to navigate complexities of fraud, corruption, employee misconduct and regulatory enquiry. View Profile
  • Darryn Hockley
    Darryn Hockley Darryn Hockley is a Forensic Consulting specialist with a background in providing expert reports and expert witness services in valuation disputes, loss and damage assessments, tax disputes and negligence claims. View Profile
  • Jovita Wong
    Jovita Wong Jovita specialises in the provision of forensic accounting and consulting services. She has assisted in the preparation of expert accounting reports and numerous independent expert reports concerning the quantification of damages and valuation issues. Prior to Grant Thornton she specialised in financial and compliance audits in the insurance and asset management industry for three years.

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