Divorce Full Disclosure Clause
I am getting divorced but do not believe that my husband has disclosed all his assets. How do I protect myself? This is a common question which clients ask in a divorce case.
I had a divorce case where I was acting for the lady. Her husband had quite a profitable business and she was unemployed throughout the marriage. They owned a big house together and had two minor children. They were married in community of property, so the split would in all probability have been a fifty fifty split and/or lifelong maintenance for the wife.
Spouse not disclosing income to SARS
In the above case my client alleged that her husband had not disclosed all of his income to SARS. He had a “cash business” and she alleged that he took large amounts of cash to his mother in the United Kingdom, and that his mother banked the money over there. She furthermore alleged that he had not declared this on his tax return under the “offshore investments” paragraph.
Affidavit stating true reflection of income & assets.
It is not always that easy for attorneys to be one hundred percent certain that somebody in a divorce matter has made a full and frank disclosure of their financial position, particularly when they are running their own business. One of the best ways for us to protect our client is to request that his/her spouse sign an affidavit stating that they have given a true and correct reflection of their income and/or assets.
Full disclosure clause
Another way of protecting a client who believes that his/her spouse is hiding income and/or assets is insisting on a so-called “full disclosure” clause. Such clause should read something along the lines:
“The Defendant warrants that he/she made a full and truthfull disclosure of all assets owned by him/her and received by him/her, and in the event of the Plaintiff becoming aware of any further assets which the Defendant did not disclose, he/she will be entitled to fifty percent (50%) of the value of such undisclosed assets”.
The aim of the “full disclosure” clause is to ensure that a client is protected after a divorce when they discover that their spouse had intentionally failed to declare their true assets. It is furthermore the ethical duty of an attorney to always act in the best interest of his/her client. A client always has the right to lodge a complaint against an attorney when they believe the attorney did not act in their best interest. The best way for an attorney to protect himself/herself from an ethical viewpoint when he/she believes that the other side has not given a full disclosure is therefore to insist on the “full disclosure” clause.
Auditor to value business
One of the biggest aims in a divorce is for each attorney to get the other side to give a full and frank disclosure of their assets. Sometimes it may be advisable to get an auditor to do a valuation on a business for example. This is costly though and one auditor's valuation may differ from another's. It is easy for a business to hide assets.
The “full disclosure” clause is a most effective clause in dealing with a spouse who has failed to disclose all his/her assets. That and an affidavit are so important to have after the divorce to protect yourself, and should be insisted on in the divorce settlement negotiations.
Family, Estate & notarial legal services
Next steps
As the assets and liabilities are being disclosed, they can be listed in a spreadsheet along with their values; which will allow for the division of the joint estate applying the accrual principle (if married with an antenuptial contract with application of accrual).
Ending an ANC with Accrual marriage
Free Antenuptial contract with accrual spreadsheet template for the division of the joint estate.
- Division of the joint estate for ANC with accrual divorce.
- When parties cannot agree on the accrual calculation; the court may appointment a referee to assist with the accrual calculation
- When parties cannot decide how to divvy the assets : The court may nominate someone to collect, realise and divide the estate (called a liquidator, receiver or curator).
- The duty to disclose your financials when divorcing:
- Insufficent disclosure from a spouse on their assets/liabilities; the section 7 notice remedy (in terms of the Matrimonial Property Act) .
- Divorce full disclosure clause
- Example of ANC with accrual marriage contract.
- Property
- Donation of property agreement not followed through.
- When property is erroneously in your spouse's name.
- Conveyancers conduct the transfer of property ownership from one spouse to another (or to a third party, if relevant).
- Divorce settlement clauses
- Enforceability of antenuptial contract overseas
- Amending an antenuptial contract
- Postnuptial contract - for when you're already married and realise you should have entered into an antenuptial contract, or you want to amend an existing agreement.
- Marriage
ANC with Accrual discussion forum
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