When a relationship ends, dividing property is difficult even when both spouses are open and cooperative. When one spouse is hiding money or property, the process becomes more stressful and complicated. In Alberta, both the federal Divorce Act and the provincial Family Property Act expect honesty and transparency in financial matters. Full disclosure is at the heart of fair property division and support.
If you are going through a separation or divorce in Edmonton and you are worried that your spouse is not telling the whole truth about finances, it may help to understand how Alberta courts approach hidden assets and how an Edmonton family lawyer can help you respond.
The Duty Of Full Financial Disclosure
In family law, financial disclosure is a legal obligation, not a courtesy. Alberta courts have confirmed that spouses owe each other full and frank disclosure in matters involving child support, spousal support and family property. This duty flows from the Divorce Act as well as the Family Property Act, which set out the framework for dividing assets and debts when a marriage or adult interdependent relationship ends.
In practice, this disclosure usually involves sworn financial statements, tax returns over several years, pay information, bank and investment statements, mortgage and loan documents and, where relevant, business records. If a spouse holds an interest in a corporation, partnership or trust, documents relating to those interests may also be required. When disclosure is incomplete, the court may treat that very seriously.
What Counts As A Hidden Asset?
A “hidden asset” is any property, income or financial interest that a spouse does not reveal to the other party or to the court. This could involve:
- Bank accounts, investment accounts or insurance policies held in one spouse’s name only
- Cash businesses where income is underreported
- Undisclosed interests in corporations, partnerships or family trusts
- Real estate held through a numbered company or a third party
- Cryptocurrency or other digital assets stored in private wallets
- Transfers of money or property to friends or relatives with the intention of moving it out of reach
Sometimes non-disclosure is intentional. In other cases, a spouse may misunderstand what has to be disclosed. Either way, Alberta courts are more concerned with the effect of non-disclosure than with the excuse for it.
How Alberta Courts Uncover Hidden Assets
If hidden assets are suspected, there are tools that can be used through the court process. Your lawyer may apply for specific disclosure orders that require detailed documents to be produced by a deadline. If important records are not provided, the court can enforce those obligations. Questioning, similar to an examination for discovery, allows your lawyer to ask the other party questions under oath, based on the financial records that have been provided.
In some situations, orders directed to third parties, such as banks, employers or accountants, may be necessary to obtain records directly from the source. Where business interests or complex transactions are involved, a forensic accountant can assist with tracing funds and valuing corporate interests. Because Alberta is a full disclosure jurisdiction, a spouse who refuses to cooperate risks the court drawing an “adverse inference” and assuming that missing information would have harmed that spouse’s case.
Consequences Of Hiding Assets Under Alberta Law
When a court concludes that there has been serious non-disclosure, it has a number of ways to respond. Under the Family Property Act, a judge may divide property unequally in order to correct the unfairness that has been created. A separation agreement that was signed without full information may be set aside. A spouse who has hidden assets may also be ordered to pay a larger share of the other party’s legal costs.
Non-disclosure can also affect support. If the court believes that income has been underreported, it can impute a higher income for the purpose of calculating child support or spousal support. This may result in ongoing payments being higher than they otherwise would have been. Deliberate hiding of assets can damage a person’s credibility in all aspects of the case.
What To Do If You Suspect Hidden Assets
If you think your spouse is hiding money or property, it is important to act carefully and lawfully. Accessing private accounts without permission or taking confidential work records can create separate legal issues. A better approach is to gather information you already have, such as older tax returns, mortgage documents, past bank statements and records of major purchases or transfers, and keep these organized.
It can help to make a timeline of unusual financial events, such as large withdrawals, sudden new debts or transfers to family members, as these details may assist your lawyer. Before confronting your spouse, it is often wise to speak to an Edmonton divorce lawyer about your concerns and possible next steps.
How Our Edmonton Family Lawyer Can Help Address Hidden Asset Conflicts
Cases involving possible hidden assets can be stressful, particularly when there are children and a long relationship history. An experienced Edmonton family law lawyer can help you understand your rights under Alberta law, identify red flags for non-disclosure and decide which tools are appropriate in your situation. Your lawyer can also help you weigh the cost and benefit of further investigation, negotiate on your behalf or present your case in court if needed.
At Verhaeghe Law, we assist clients across Edmonton, Athabasca and Whitecourt with complex property and support disputes, including cases where financial disclosure is a concern. To discuss your situation, contact our Edmonton family lawyers or call (587) 410-2500 to book a consultation.
Please note, the information in this article does not constitute legal advice. It is intended as a general overview of an area of family law. For legal advice, please consult with a lawyer.