Hiding assets during divorce proceedings using so-called ‘money-go-round’ structures is no way to avoid a large divorce settlement, following a recent headline-grabbing High Court verdict.
In the high-net-worth divorce case of Haskell v Haskell, Preston Haskell IV had presented to the court a net financial position of negative £50 million.
But after analysing the debts, the court found that they were often owed to Mr Haskell’s own family trusts or close relatives.
As such, they assigned no weight to those debts and eventually awarded a £6 million settlement to Mrs Haskell.
Mr Haskell also claimed to be undergoing liquidity problems that prevented him from paying Mrs Haskell her financial settlement.
However, in recent months he had posted to his social media accounts from several holiday destinations including Switzerland, Ibiza, South Africa and St Tropez.
Moreover, the court also found that Mr Haskell only began to mention financial difficulties later in the divorce process when it became apparent that his wife was unwilling to reconcile their differences.
As such, the court’s verdict determined that the reality did not match Mr Haskell’s claims – and that his behaviour towards the end of the marriage amounted to coercive control.
The ruling has several implications for divorcing couples in England and Wales. First, by falsely representing his financial position in the later stages of the marriage, Mr Haskell committed what the court considered to be coercive control.
Coercive control falls into the category of unreasonable behaviour for the purposes of divorce, giving Mrs Haskell a clear reason to file for divorce.
At the same time, if Mr Haskell did not contest the divorce, he could be seen to be admitting to that behaviour – which under the Serious Crimes Act 2015, carries a maximum jail term of five years.
Contesting the divorce inevitably cost more in court through family lawyers than if Mr Haskell had described his finances and business assets honestly from the outset, and received a financial order to pay his former wife’s legal fees.
And finally, the courts aim to ensure that no individual benefits from inaccurately describing their finances, which means the amount awarded to Mrs Haskell in this instance may have been higher than it otherwise would have been.
Divorce mediation is an alternative to this kind of court battle, giving both parties an opportunity to resolve any dispute amicably with the help of a professional family mediator with years of experience.
By doing so, both parties can settle on an acceptable division of finances, assets and arrangements for your children, based on an honest picture of the family finances, and without running up a costly court bill.