Some HNW divorce battles can develop into a game of hide and seek as sizeable assets go missing
Over the course of a marriage that lasted more than three decades, Texans Ed and Marie Bosarge amassed a treasure trove of assets that included a 12-home property portfolio (including a private island in the Bahamas), a $5 million Egyptian mummy and a 180ft superyacht.
Then Ed filed for divorce in 2017 and things turned ugly. The pair did not have a prenup and had married in Texas a community property state where everything earned during their marriage, including profits from his business Quantlab, would be considered as jointly owned.
According to Forbes, Eds net worth is at least $1 billion, but according to his lawyers, the couples community property assets total a mere $25 million.
Bosarge was able to make such a claim thanks to the deployment of several trust structures. Everything from company stocks to a $1.9 million necklace was owned by trusts held in states such as South Dakota, which allow assets to be moved and protected without notifying beneficiaries, even if they might be excluded from the new trust.
In a lawsuit, Marie alleged that the structures were used to hide income and property and to hold what would otherwise have been personal income and assets. When they were approached by CNBC over these allegations, attorneys for Ed declined to comment, citing confidentiality rules.
However, in court papers obtained by the outlet, his attorneys have claimed that the assets are owned and controlled by the trust, not him, and are therefore not marital property.
The case has since been put on hold, but it provides a clear example of how complex structuring has become a significant part of many high-value divorce proceedings.
Tax optimisation not divorce tends to be the main motivation for asset structuring in the first instance, says Dr Stephen Bence, CEO of law firm Vardags.
As tax rules have become more and more sophisticated, so tax planning has become more and more sophisticated. And the pace of this cat-and-mouse game has undoubtedly increased in recent years.
But these mechanisms can often be used to later fend off a spouse, especially in certain offshore jurisdictions where one can establish a company without the requirement to prepare accounts or be named in a public record of ownership.
Some jurisdictions such as Panama even use bearer shares, which allow the owner to hold a physical share certificate, meaning nobody else knows who owns the company.
Creating a web of companies, across multiple jurisdictions, can make this even more impenetrable, Bence explains. Then there are cases when a party will not hide the asset but instead claim that they are nothing to do with their true owner.
This can entail giving away assets to relatives or trusted associates, or using trusts with a charity as the ultimate beneficiary.
In one recent example, Chinese conservationist Li Quan attempted to claim a share of 25 million worth of assets in a tiger charity by alleging that her spouse Stuart Bray had spent donations on fine wines.
William Longrigg, a partner at Charles Russell Speechlys, tells Spears that hes had several cases where essentially charitable trusts have been set up, but questions has been raised as to the how the assets have been used by a party.
These concepts are very little understood by the people who set up the trust because they take the firm view that nobody can touch the stuff once its in trust, but the English courts may have a different approach, he says, noting that his practice has seen a significant increase in complex financial cases over the past 25 years.
Some parties keep assets in jurisdictions that are unlikely to uphold an English court order requesting access, says Bence.
Its all very well a claimant having a piece of paper that says they are entitled to a large sum of money, but if the asset is in a hostile jurisdiction it can be impossible to enforce the English order.
London enjoys a reputation as the divorce capital of the world not just because of its courts generous awards to financially weaker spouses, but also because of the analysis that courts carry out in terms of assets and resources, notes Longrigg. English courts tend to take a robust view on the reality of asset structuring.
In England, individuals who are getting divorced have a duty of full and frank disclosure to the courts, and thats very important, he tells Spears.If they dont give a full and frank disclosure, essentially theyre in contempt of court, which is potentially punishable by imprisonment.
Before the money can be demanded, it must first be tracked down. Vardags and Charles Russell Speechlys both have teams that can forensically trace assets through rigorous investigation of transactions, investments and so on. Sometimes information in the public domain can be a giveaway, Bence says.
In other cases a more personal method may be required. Clients might be asked for details or recollections that can be used to build a picture of their spouses activities.
In one instance, Bences client made his team aware that their spouse had been on a business trip to the US but no sign of this appeared on their credit card statements.
The firms team followed up the information and discovered that the spouse had been using a company credit card linked to a business in the Cayman Islands, itself owned by a Cayman Islands trust, of which the spouse was a beneficiary.
That small detail led to us uncovering a web of internationally based companies serving to conceal a vast fortune, Bence recalls.
While those who are dedicated to concealing assets will try a huge variety of tactics, that is no guarantee they will succeed it is extremely difficult to hide assets from a concerted, professional and skilled interrogation.
The Spears Family Law index 2021
What is divorce mediation?
To the victor, the spoils: When UHNW divorce becomes a battle, this is how top lawyers win
Read this article:
When divorce becomes a game of 'hide and seek' - Spear's WMS
- You could own this private island off the Florida Keys for $75 million - AOL - February 27th, 2024 [February 27th, 2024]
- From $389k: Who owns Qlds private islands, what they paid - Courier Mail - February 27th, 2024 [February 27th, 2024]
- The World's 16 Most Expensive Private Islands to Visit - Yahoo Finance - February 24th, 2024 [February 24th, 2024]
- Cruise lines will pay new tax on private islands in the Bahamas - FOX 35 Orlando - February 24th, 2024 [February 24th, 2024]
- Michael Stern's JDS Development Sued Over Private Air Travel - The Real Deal - February 24th, 2024 [February 24th, 2024]
- YouTube Star MrBeast Takes Over Royal Caribbean's Private Island - Cruise Hive - January 30th, 2024 [January 30th, 2024]
- 7 Private Islands In The U.S. That You Can Book For Less Than $1,000 A Night - TheTravel - January 30th, 2024 [January 30th, 2024]
- Peter Island Resort Re-Opens with Luxurious New Amenities in 2024 - St Vincent Times - January 29th, 2024 [January 29th, 2024]
- Jeffrey Epstein's Controversial Private Island To Be Turned Into Resort: Report - NDTV - January 7th, 2024 [January 7th, 2024]
- Where is Jeffrey Epstein's island and what happened there? - KRTV NEWS Great Falls - January 7th, 2024 [January 7th, 2024]
- UK Royal Had Orgy With Minor Girls On Private Island, Epstein Files Reveal - NDTV - January 7th, 2024 [January 7th, 2024]
- World's best private island resorts - Cond Nast Traveller India - January 7th, 2024 [January 7th, 2024]
- Dont hurry, be happy at Fijis carefree Kokomo Private Island - Style - October 29th, 2023 [October 29th, 2023]
- How to Visit the Pacific Coast of Panama, According to a Travel Expert - Travel + Leisure - October 29th, 2023 [October 29th, 2023]
- Fresh Puerto Rican Tostones and Stone Crab Highlight New ... - PR Newswire - October 29th, 2023 [October 29th, 2023]
- Progressive White Women in Shambles After Taylor Swift Becomes ... - The Hard Times - October 29th, 2023 [October 29th, 2023]
- If You Can Take the Cable Car to the Colosseum, You're in Vietnam - The New York Times - October 29th, 2023 [October 29th, 2023]
- Hot property: five homes for sale on the Canary Islands - Financial Times - October 29th, 2023 [October 29th, 2023]
- Where to Relocate: Cayman Islands with KPMG Cayman Islands - The Fintech Times - October 29th, 2023 [October 29th, 2023]
- 10 budget-friendly island resorts for a cheap beach vacation - USA Today - October 29th, 2023 [October 29th, 2023]
- Talk Show Host Patricia Bryan Sues Police and Government | Loop ... - Loop News Cayman - October 29th, 2023 [October 29th, 2023]
- Insulators in Farasan Islands Reserve to protect birds - Arab News Pakistan - October 29th, 2023 [October 29th, 2023]
- Iconic Piece of New Disney Ship Arrives at Shipyard - Cruise Hive - October 5th, 2023 [October 5th, 2023]
- The worlds tiniest island is for sale - The Spaces - October 5th, 2023 [October 5th, 2023]
- WHAT'S NEW IN THE BAHAMAS IN OCTOBER 2023 - PR Newswire - October 5th, 2023 [October 5th, 2023]
- New Zealand named one of the friendliest countries in Conde Nast ... - New Zealand Herald - October 5th, 2023 [October 5th, 2023]
- Annual Cruise Hive Awards Open for Best Ships, Cruise Lines and ... - Cruise Hive - October 5th, 2023 [October 5th, 2023]
- The best islands in Europe: Readers' Choice Awards 2023 - Cond Nast Traveller - October 5th, 2023 [October 5th, 2023]
- Islands in the sun - Irish Post - October 5th, 2023 [October 5th, 2023]
- Relax and unwind: where travellers find well-being and peace in the ... - Euronews - October 5th, 2023 [October 5th, 2023]
- What Prigozhin's Death Reveals About Russia Mother Jones - Mother Jones - October 5th, 2023 [October 5th, 2023]
- SERHANT. Achieves $4 Billion in Volume at Three Year Milestone - PR Newswire - October 5th, 2023 [October 5th, 2023]
- supports British Virgin Islands with debt management reform ... - Commonwealth - October 5th, 2023 [October 5th, 2023]
- Discovering Easter Island and Pitcairn by boat - Yachting Monthly - October 5th, 2023 [October 5th, 2023]
- Cleanup from Maui fires complicated by island's logistical ... - Greenfield Daily Reporter - October 5th, 2023 [October 5th, 2023]
- Commission on Limits of Continental Shelf to Hold Fifty-Ninth ... - United Nations - October 5th, 2023 [October 5th, 2023]
- HSBC appoints Head of Wealth and Personal Banking for Channel ... - Channel Eye - October 5th, 2023 [October 5th, 2023]
- Downriver Dispatches - The Wahkiakum County Eagle - October 5th, 2023 [October 5th, 2023]
- The 7 Best Private Villas and Escapes in Queensland Australia - Robb Report - August 30th, 2023 [August 30th, 2023]
- 4 Picturesque Private Islands on Airbnb You Need to See to Believe - HGTV Canada - August 30th, 2023 [August 30th, 2023]
- Five of The Best Islands in Malaysia - British Muslim Magazine - August 30th, 2023 [August 30th, 2023]
- Best Islands and Resorts in the Caribbean - 86758 - Luxury Travel Magazine - August 30th, 2023 [August 30th, 2023]
- Luxury beyond boundaries: Exploring the world's most exclusive ... - TravelDailyNews International - August 30th, 2023 [August 30th, 2023]
- 10 Island Destinations That Will Help You Plan A Budget-Friendly ... - TheTravel - August 30th, 2023 [August 30th, 2023]
- Caribbean resort outlines US$8 million rebranding overhaul - TOPHOTELNEWS - August 30th, 2023 [August 30th, 2023]
- Caribbean cruising gears up for one of its biggest years yet - Travel Weekly - August 30th, 2023 [August 30th, 2023]
- Citi Ultima Card review: Luxury private island access, supercar drive ... - AsiaOne - August 30th, 2023 [August 30th, 2023]
- Union pool recognized by training company | Local News ... - The Missourian - August 30th, 2023 [August 30th, 2023]
- Arctic Circle Express Train Journey in Lofoten Islands and Narvik ... - Luxury Travel Magazine - August 30th, 2023 [August 30th, 2023]
- How Maui's Wildfire Sparked a Disaster Capitalist Power Grab for ... - Earthjustice - August 30th, 2023 [August 30th, 2023]
- Pres. inaugurates completed projects in three islands of Laamu atoll - Raajjemv - August 30th, 2023 [August 30th, 2023]
- Insight: Boosting Resilience of Pacific Islands' Infrastructure - Mirage News - August 30th, 2023 [August 30th, 2023]
- These Are The 10 Best Islands To Visit In Europe This Summer - TheTravel - July 23rd, 2023 [July 23rd, 2023]
- Billionaire who visited Epstein island pours thousands into coffers of vulnerable Dem Senate races - Yahoo News - July 23rd, 2023 [July 23rd, 2023]
- MSC's Explora Journeys Takes Delivery of First-Ever Cruise Ship - Cruise Hive - July 23rd, 2023 [July 23rd, 2023]
- Paradise Found: Discover The 6 Best All-Inclusive Resorts in The ... - Wealth Of Geeks - July 23rd, 2023 [July 23rd, 2023]
- How to holiday in the Seychelles with a budget-friendly itinerary - New Zealand Herald - July 23rd, 2023 [July 23rd, 2023]
- New construction home on Long Island, a small town off the coast of ... - Press Herald - July 23rd, 2023 [July 23rd, 2023]
- Geopolitical duel in the Pacific: Solomon Islands security at risk as ... - The Interpreter - July 11th, 2023 [July 11th, 2023]
- Lake Champlain trip highlights paddling and campground amenities - Adirondack Explorer - July 11th, 2023 [July 11th, 2023]
- Inside the subsea cable firm secretly helping American take on China - Reuters - July 11th, 2023 [July 11th, 2023]
- The ultimate holiday home? A $100 million private island in the Bahamas that starred in James Bond and Pirates of the ... - Country Life - May 18th, 2023 [May 18th, 2023]
- 8 Of The Best Private Islands To Rent In 2023 - Forbes - May 18th, 2023 [May 18th, 2023]
- Getting Scuba-Certified in Fiji Is the Best Way to Explore the Underwater World - Robb Report - May 18th, 2023 [May 18th, 2023]
- Find your own island in the sun amid the blissful atolls of the Maldives - Evening Standard - May 18th, 2023 [May 18th, 2023]
- Jeffrey Epstein sexual abuse case: Deutsche Bank to pay $75 mn to settle a suit - Hindustan Times - May 18th, 2023 [May 18th, 2023]
- JPMorgan CEO Jamie Dimon says he's 'so sad' the bank had relationship with Jeffrey Epstein - CNBC - May 18th, 2023 [May 18th, 2023]
- Top seven luxurious private flight getaways in Texas - South West Londoner - May 18th, 2023 [May 18th, 2023]
- What Are the Most Expensive Celebrity Divorce Settlements? - We Got This Covered - May 18th, 2023 [May 18th, 2023]
- Getting Scuba-Certified in Fiji Is the Best Way to Explore the Underwater World - Yahoo Singapore News - May 18th, 2023 [May 18th, 2023]
- AG nominee says more staffing, resources needed | News ... - Virgin Islands Daily News - May 18th, 2023 [May 18th, 2023]
- Carefree and car-free: The glorious islands where vehicles are ... - Daily Mail - May 18th, 2023 [May 18th, 2023]
- Reinsurance firm supporting treatment centre fundraiser - Royal Gazette - May 18th, 2023 [May 18th, 2023]
- Corinthia to open luxury resort in Maldives - Times of Malta - May 18th, 2023 [May 18th, 2023]
- Investing in Scotland's islands - gov.scot - The Scottish Government - May 18th, 2023 [May 18th, 2023]
- Calls to make education 'more affordable' for Pacific island students - Stuff - May 18th, 2023 [May 18th, 2023]
- 14 Romantic Resorts with Private Plunge Pools - Islands - December 26th, 2022 [December 26th, 2022]
- Rainy Lake Island - Northern Ontario, Ontario , Canada - Private Islands - December 26th, 2022 [December 26th, 2022]
- Darby Island - The Exumas, Bahamas , Caribbean - Private Islands - December 21st, 2022 [December 21st, 2022]
- Private islands for sale in Queensland going cheap, but lifestyle has ... - December 18th, 2022 [December 18th, 2022]