When a marriage ends, one spouse sometimes turns out to have far less on paper than the other expected. The business is worthless. The house belongs to someone else. There is barely anything to split.
Two Family Court decisions this year, MK v SK [2026] EWFC 28 and DR v ES [2026] EWFC 15, deal with exactly that scenario, and both involved husbands who said they had almost nothing when the surrounding evidence pointed the other way.
In each case, the court looked past the paperwork to work out who really held the money. And in each case, the husband came out of it worse than he would have done had he simply been open from the start.
Written by Yi Ling Lio, Private Client Paralegal
Do you have to disclose everything in a divorce?
Yes. Anyone in financial remedy proceedings owes the court a duty of full and frank disclosure. The court cannot divide finances fairly if it cannot see them properly in the first place.
Where disclosure is patchy or unreliable, the court can draw adverse inferences. Moher v Moher [2019] EWCA Civ 1482 confirms that a judge can work from the evidence that does exist, applying common sense and the probabilities of the case. Leaving gaps in the evidence does not mean the court has to ignore them.
The principle runs back to F v F [1994] 1 FLR 359. Where someone’s concealment makes the true position impossible to establish, the court would rather risk an outcome that disadvantages the person who withheld information than one that disadvantages the person who complied.
The problem tends not to stay contained. Once a judge decides a party has not been straight about one thing, everything else that party says becomes harder to believe. Credibility can matter as much as the assets themselves.
MK v SK: the husband who said he had almost nothing
The parties had been married for around 19 years. The husband had sold an internet start-up for more than $10 million, then co-founded a technology group and ran it as chief executive for over two decades. During the marriage the family used homes in London, the English countryside, Toronto, New York, Singapore and the Caribbean, all paid for through the business. The judge estimated the lifestyle might have cost as much as $1 million a year.
The husband’s case was that he had virtually no personal wealth. His account was that he had worked 80-hour weeks for twenty years without salary or bonuses, lived off business expenses, and gradually drawn down a $10 million loan he had made to the company. His shares sat in an offshore trust he said he could not control, and the business was close to insolvency in any event.
Mr Justice Peel did not accept his account, and two fairly small pieces of evidence weighed heavily against him.
The first was a photograph the wife took of a whiteboard after they separated. It set out the structure of the business and the trust, with “UBO” (Ultimate Beneficial Owner) written above the husband’s name. The judge decided the husband had either written those words or directed that they be written, and took the diagram as an accurate picture of the real position.
The second was an email in which the husband referred to the trust’s protector as the administrator of “my family trust”. That was hard to square with his claim that the trust was nothing to do with him.
The trust structure did not put the assets out of reach either. The question was not who technically owned them but whether, in practice, they were available to him, following Whaley v Whaley [2011] EWCA Civ 617. In evidence the husband accepted the trustee would do whatever he asked, which largely ended the argument that the money was beyond his reach. The trustees made matters worse: they repeatedly gave the husband’s solicitors the same unhelpful reply, then ignored the formal letters of request the court sent.
The court did not simply adopt the wife’s figures, however. Mr Justice Peel accepted the business was in genuine difficulty and put the husband’s wealth in the low millions, well below what the wife had claimed. The court used the adverse findings to make sense of the evidence it did have, not as an excuse to speculate.
The wife retained the mortgage-free former matrimonial home, worth approximately £837,500, and received £525,000 to clear debts, many of them run up during the litigation, plus a further £1.55 million as capitalised income. The judge dealt with the husband’s needs briefly. He retained access to undisclosed wealth, and if the outcome was less favourable than he wanted, that was down to how he had presented his finances. By the end of the proceedings, the parties’ combined legal costs exceeded £850,000.
DR v ES: the husband whose assets belonged to his parents, or so he said
DR v ES and others (Further LSPO Application) shows the same approach at an earlier stage, and what the court can do when one spouse is left unable to fund the litigation.
The parties married in 2008 and separated in early 2021. Much of the family’s wealth sat in two property companies. When the wife issued her financial remedy application, the husband disclosed in his Form E, for the first time, that he had never owned his share in one of the companies outright. He claimed he held it on trust for himself and his parents in equal shares, then sold his interest back to his parents for around £1.3 million, which on his account left them as the only beneficial owners.
That argument failed at a preliminary issue hearing. In DR v ES & Ors [2024] EWFC 176, Mr Justice Francis found that the husband owned the entire beneficial interest and that his parents had “closed ranks” with him to defeat or reduce the wife’s claims. The husband and his parents were ordered to pay the costs of the hearing, and permission to appeal was refused.
On the unchallenged expert evidence, the husband’s net assets came to around £18 million. The wife’s liabilities exceeded her assets.
That gap led to the January 2026 judgment. The wife applied for legal funding under section 22ZA of the Matrimonial Causes Act 1973, which lets the court order one party to help fund the other’s costs where that is needed for a fair hearing. Where the paying party has been unclear about their finances, the court will not treat that uncertainty as a reason to refuse funding. It can proceed on the basis that they are able to pay, so their incomplete disclosure counts against them rather than helping them.
The wife sought just over £726,000, her fourth funding application. The husband accepted she needed the money but said he could not raise it in time, mentioning only on the morning of the hearing that he intended to meet his bank.
Mr Justice MacDonald was not convinced. A man worth around £18 million had complied with every previous funding order, and there was no good reason he could not manage this one. The judge ordered him to pay £560,120, part of it covering costs the wife had already run up. Her solicitors could not be expected to carry on with large bills unpaid, especially when the husband was planning to use borrowed money to clear his own lawyers first.
The order came with strict safeguards. Payment was by instalments, applied in a prescribed order, and the husband was barred from paying his own solicitors ahead of, or more than, the wife’s. The point was equality of arms: one party should not litigate with fully funded representation while the other struggles to keep a legal team instructed. The husband was also warned that further obstruction by him or his parents could lead the court to revisit the funding arrangements.
By that stage the financial remedy proceedings alone had cost around £2 million, with another £1.5 million spent on litigation about the children and £800,000 incurred by the parents themselves. Mr Justice MacDonald described the litigation as financially devastating for the family.
What the two cases have in common
In MK v SK the husband relied on an offshore trust. In DR v ES he said the assets belonged to his parents. However, in neither case did the court take the legal structure at face value. It asked who actually controlled the assets and whether the explanation held together against the rest of the evidence. Where it did not, the uncertainty was resolved against the party who created it.
The damage is not confined to the figures. Once a judge doubts one part of a party’s evidence, the rest becomes harder to accept. And neither dispute was cheap. Between them the families spent several million pounds, much of it linked by the judges to the way the litigation had been run. Trying to hide or reduce wealth made both cases more expensive, not less.
What can I do if I think my spouse is hiding assets?
A large gap between the disclosed finances and the lifestyle enjoyed during the marriage is often the starting point. If the figures on paper could not have paid for the life you shared, the court will want that explained.
Gather what evidence you can. Records showing how household expenses were met, who provided financial support, and any documents referring to trusts, companies or informal family arrangements may all become relevant.
Complex structures should not put you off. Offshore trusts, corporate vehicles and family ownership arrangements do not by themselves defeat a financial claim. The court looks at practical reality as well as legal form, including who can access or control the assets.
A shortage of funds need not stop a case either. As DR v ES shows, the court can require one spouse to fund the other’s legal costs so that both can participate on an equal footing.
The court will not, however, speculate about hidden wealth without evidence, and genuine falls in asset values will be taken into account. The aim is not to punish anyone but to reach a fair outcome on the true financial position.
Key takeaways
- Full and frank financial disclosure is a duty owed to the court. Where it is breached, the court can draw adverse inferences from the evidence that is available.
- A substantial mismatch between the disclosed finances and the lifestyle enjoyed during the marriage will attract close scrutiny.
- Trusts, companies and family ownership arrangements do not automatically place assets beyond the court’s reach. Access and control matter more than labels.
- The court can order one spouse to fund the other’s legal costs where necessary for both parties to participate fairly.
- Poor disclosure rarely works as a strategy. It increases costs, undermines credibility and invites conclusions that full disclosure might have avoided.
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