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MKD follows, hunts hidden assets in marital breakups: Downs

Finding hidden assets for family law counsel is key to ensuring equitable settlements among sparring ex-spouses, says Jim Downs, founding partner and managing director of MKD International Inc. 

"The money is obviously the most frequent source of contention in relationship breakups," Downs tells AdvocateDaily.com. "So when it comes to financial conflict in marital and common-law disputes, it comes down to who owns what, who is entitled to what, and who has contributed to what."

There are legal differences between marriage and common-law relationships, as covered by the Ontario Family Law Act, and the division of assets varies, he says.

The Act acknowledges a common-law couple after three years of continuous cohabitation. Access to children, spousal support and issues dealing with parenting are the same for married and common-law couples, but the division of property varies between the two types of relationships, says Downs, a retired Toronto police detective.

For MKD, it's important to track down any assets that may have been hidden in a bid to avoid it being shared in case of a divorce or breakup. It's vital that parties involved know what's at stake to ensure a fair and legal division during a breakup, he says. 

"We do surveillance on ex-partners who claim they can't do this or can't do that," Downs says.

A full-service private investigation company, MKD has dealt with numerous cases where a spouse claimed they're not employed and can't pay support "when, in fact, they are working, doing well and hiding their assets," he adds.

Downs has investigated cases where a spouse said they weren't working and unable to meet obligations but were actually living with someone and earning a living.

The firm has expertise in finding hidden valuables and verifying income, a complicated and difficult process, he says. For example, he notes, in Ontario, shareholder information about an incorporated firm is off limits to queries.

"So you can't get in behind who actually owns the company, only officers and directors, and often it's a lawyer who holds those positions in trust," Downs explains. "Ultimately, there are all sorts of ways of hiding assets and income, especially if someone is self-employed.

"That's where we often get involved, with these financial issues revolving around matrimonial and common-law break-ups," he says. "It's trying to track the money."

The information uncovered is then given to a family law lawyer who uses it in negotiations, in court, or in some cases to notify the Family Responsibility Office, which can enforce compliance to with court orders and financial support, Downs says.

"We do get involved with the cheating spouse, although whether someone is cheating, in our courts, it has no impact on a divorce settlement," he says. "It doesn't change the financial picture or obligations. But this is where actions are initiated and we then focus on assets."

Downs says a spouse shifting assets to hide it from the other is common.

"If someone knows or foresees what is going to happen, they may start a strategy in terms of hiding or moving assets and taking money out of accounts," he says. "That occurs on both sides of the table — it's almost 50-50 from my experience in terms of shifting assets.

"With exceptions, a person can't steal from their spouse while married," Downs says. "If there's a joint bank account, your spouse can clear it out and it's not theft. When it comes to real estate, you need two signatures, but I've seen cases where signatures were forged.

MKD also employs its resources and skills in cases involving finding people who have vanished.

"Sometimes it's an ex-spouse who absconded, or maybe it's a potential witness who may have relevant information about a case," Downs says. "That's not as common but it occurs."

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