Why You Should Never Trust What Your Former Spouse Tells You About Their Income in Your Separation or Divorce in Ontario!
How many times have you thought that your ex-spouse is hiding money, investments and assets in your separation or divorce?
Probably a few times!
Hi, my name is Thomas O’Malley. I’m an experienced family lawyer in Durham Region and the GTA.
Let’s see how Jack tried to hide his money, assets and investments from his wife, Nicole.
Jack owned a waste management company in the GTA. Jack reported approximately $35,000 of income on his personal income tax returns for the three years before the date of the valuation of his business. He had did have any corporate returns prepared for the business.
When Nicole’s family lawyer asked him to produce general ledgers, paid bills, and accounts receivables records for the business, Jack was so uncooperative that Nicole’s lawyer had to bring a motion in Ontario family court to compel him to produce these records.
Some records were still not produced, partially on the grounds that they did not exist, while other records were produced with all of the important information blacked out.
The business valuator in this situation knew that Jack’s business was most likely very profitable even though Jack did not produce the necessary business records to show that.
The business valuator had Nicole collect evidence from her diaries and photo albums of everything from recent years that might be useful, such as photos of her cars, home, and vacations.
The business valuator then prepared a lengthy report consisting of 25 colour photos followed by a brief valuation of each photographed item. This report included photos of mink coats, a large backyard swimming pool, new expensive furniture, Nicole’s new Mercedes, Nicole’s expensive jewelry, and family photos of Hawaiian vacations.
All of the expenditures for these assets and vacations had been made during the past few years so that Jack could not easily claim they reflected old income. The business valuator explained that the lifestyle was typical of a person who earned at least $500,000 a year. The resulting income was a starting point to arrive at a value of the business.
It became obvious during the family court trial in this matter that the lifestyle evidence in the photos was impossible to attain on the $35,000 annual income reported on Jack’s personal income tax returns.
Additionally, Jack’s unwillingness to co-operate in producing the required business records simply reinforced the conclusion that his income was much, much higher than he claimed.
Here is the lesson from Jack’s case: When financial documents cannot be accessed or do not exist, circumstantial evidence can create a compelling case verifying inconsistencies between income and lifestyle.
If you have any questions about your separation, divorce or family law case and you would like our help, there’s a few ways to contact our office. You can leave a message on my Facebook law office page, visit my website at www.canadiandivorcelegaladvice.com, or call me directly at 905-434-8837.
We would be happy to speak to you.
Oh, by the way, did you know you can protect your family law rights and get essential information on settling your family law issues with your former spouse with the daily indispensable family law advice and tips at my FREE Facebook group?
Click here to find out more: Durham Region Separation and Divorce Legal Support Group
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