In many cases, separation is amicable and both parties go their separate ways, ready to start the next part of life. Unfortunately, there are times where property and finances become tangled and an ex-partner may try to take things that aren’t rightly theirs. One big issue is if they try to take control of your shared business. Below we’ll explain what to do in this situation and how to protect your assets.
Business assets during divorce and family law proceedings
In family law disputes such as divorce or other matters, an ex-partner can start taking control of business assets and hiding cash. If this happens, it’s crucial to act quickly to protect your financial interests.
A separation does not give your ex the right to exclude you from business income and or continuing to exercise your right as director and or shareholder of a company.
Ways an ex-partner could try to take control of the business
There are many common ways an ex will try and deprive you of your financial claim to matrimonial property, as well as taking control of the former family business or companies. Below we’ll cover the examples we see most often.
Removing you as a director or transferring your shares
To gain control, an ex-partner will often try and remove you as a director and or transfer your shares. If you want to leave the business and for your ex-partner to take control of it, then your resignation and transfer of shares should be done fairly. If you want to maintain some control in the company, you should seek legal advice if they are trying to push you out of the business.
Hiding income or assets
In some cases, an ex-partner may even try and hide the income and or assets behind a trust. The Family Court has the power to go behind the use of trusts in certain circumstances, and such behaviour is usually viewed poorly by the Court if used in an attempt to hide or shield assets.
It may also be easier for a partner to hide money if they run a business, especially a cash business. Any differences in the business activity statement (BAS) expenses claimed and the income stated is usually an indicator of attempts to understate the income from the company.
Other examples of hiding income or assets include attempting to manipulate their reported income, delay contracts, or have invoices paid into different or hidden bank accounts. They could also use the business’ funds to pay for personal expenses but label them as business costs.
Some people even attempt to “run down” the business so it is valued at less than what it is really worth. Thankfully, family law business valuations look at profit and loss over the previous three years.
Proactive steps you can take to protect your assets
If your ex-partner is trying to take control of your business, below are some proactive steps you can take.
- Gather documents: Collect all financial documents, including bank statements, property titles, and loan documents, to have a complete picture of your financial situation.
- Monitor accounts: Keep an eye on your accounts for any unexplained withdrawals or transfers that may indicate asset control by the ex-partner.
- Seek legal advice: Consult with a family lawyer who can help uncover hidden assets and ensure you receive a fair property settlement.
- Apply for Injunctions: If necessary, seek legal advice to apply for injunctions to prevent assets from being sold, hidden, or moved before the settlement is finalised.
If you have any questions about family law matters, we’re always here to help. Get in touch to discuss your options with an experienced family lawyer, including Dane Thornburgh (Dane@qlglaw.com.au).