| | | | | | | Accountants help to find hidden wealth | | Reproduced from The Irish Times | | By CAROL COULTER, Legal Affairs Editor, 8th December 2008 | | | Forensic Accountants are often needed in family law proceedings where wealthy parties, usually the husbands, seek to hide the true extent of their wealth from their wives, Cork solicitor Ann Fitzgerald told the Round Hall family law conference.
Accounts do not always gave an accurate picture of a company or of its financial well-being at the time it is being examined in court during family law proceedings, she said.
The accounts do not show the strategy of the business, its expansion plans and future prospects. Sometimes attempts are made to manipulate the accounts, and sometimes the holder of the major assets of the marriage (usually, though not necessarily, the husband) deliberately seek to conceal their wealth.
The assistance of forensic accountants was required in such situations.
She stressed that this would rarely arise in a case involving two PAYE workers owning on family home, but it did arise in cases where there were multiple businesses, limited companies or partnerships, a number of investment properties and where the husband may be self-employed with several sources of income.
Ms. Fitzgerald said some husbands may undertake an exercise of setting up a "parallel" trading company, owned by a third party but in all practicality run by the husband which takes over a large percentage of the trade of the original company.
The Master of the High Court had ruled that in seeking discovery of all documents, there could be no "fishing", but often the client was a good source of information about possible deceit.
She said in one case the wife spotted that her credit card had been paid for by a bank account of the husband which had not been disclosed.
Gerard Ryan, of Mason Hayes and Curran solicitors, told the conference that the impact of a divorce or separation may be felt even more sharply where there were third parties in a company.
"If you are a shareholder in a company, do you want your co-shareholder's disaffected spouse to be entitled to shares in the company?" he asked.
If not, appropriate legal frameworks would need to be put in place, Mr Ryan said.
These can include providing for an automatic transfer of shares to the other shareholders, at market value, in the event that the shareholder gets divorced or legally separated. | | | | |  For further information, please contact Marion Campbell Solicitors by calling (01) 475 9345, or by filling out an on-line enquiry form. |
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