Implications of the surrender of equity interest in the matrimonial home, business, pension or any other asset, to quicken the divorce process.
It often happens that clients consult you, as an attorney, asking if there is any way that they can hide their assets in a divorce matter so that they can achieve a positive result in their favour. There is a massive risk in this kind of situation that if they do that and the other party finds out about those assets, they may end up in a worse position, as the courts will take a serious point against this.
Clients sometimes ask you how they can get rid of funds, for example in a money market account, so that their spouse gets less out of the divorce at the end of the day. You cannot actually do this as the other party is entitled to see the full history of the account. If for example you make withdrawals from that account from the bank and are unable to account as to how you spent the money, the end result may well be that the other party would be entitled to half of those funds even if they no longer exist and or have been spent.
Most of the time in a divorce matter the one spouse tries to get a better result financially than the other spouse. It does from time to time however happen that one spouse wants the divorce quite more than the other spouse. Sometimes a spouse is so eager to get out of the marriage that he or she is even prepared to write off his or her share to any equity which there may be entitled to, for example in a house or in a pension fund.
I had one matter where the lady was prepared to write off her half share of the equity in a house valued at approximately R700 000.00. There was only a small amount owing on the bond. In this case however she was the primary breadwinner, and was more eager to get divorced than her husband. What do you as an attorney advise your client to do in this situation?
Attorneys are bound by certain ethical rules where at all times they are required to act in the best interest of their client. If you do not act according to these ethical rules, you can be taken to the Law Society if a complaint is lodged against you. In a divorce matter both attorneys try to get the best result for their respective client. However at the end of the day it is the client’s choice as to whether they are prepared to propose a certain settlement or accept a certain settlement. You also reserve the right to withdraw from the matter if you feel that your client is being too generous in the settlement.
In a case where a client is prepared to give up their share of the equity, all you can advise them is that at the end of the day it is their decision, but that if you were in their shoes you would not agree to what they are agreeing to. The problem in this kind of case is that a client may at a later stage after the divorce regret giving up a large share of the equity. It is then unfortunately too late for them to change their mind, as the divorce has already gone through.
Clients should never be over eager to part with large shares of equity because they want the divorce to go through quickly. A divorce settlement is a major decision, and clients should rather be patient before agreeing to any settlement. If they agree to any settlement and agree to write off equity, the attorney at the end of the day cannot be blamed, when he or she has advised their client not to do that.
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