How Asset Tracing Works – A Step By Step Guide

October 1, 2023 - Reading time: 7 minutes

Asset tracing is a task which is typically undertaken by private investigators; it typically involves pinpointing and tracking an individual's or a company's assets, such as money, property, or investments. Often, the goal of asset tracking is to reclaim lost, unjustly taken, or otherwise unlawfully procured property. The process typically entails checking records, interviewing witnesses, and employing other investigative methods used to reveal the location and value of any disputed assets. Lawyers who focus on finding unclaimed assets and securing their return are known as "asset tracing solicitors" - they assist by helping to identify assets and then commencing the relevant legal proceedings to recapture them.

Asset tracing can be utilized in order to check that all assets have been taken into account and are fairly distributed during such procedures as divorce, bankruptcy, or fraud investigations. It can also be used to check for assets which might have been relocated or hidden to avoid tax officials, creditors, or other people. Occasionally, asset tracing may necessitate partnership with international law enforcement or financial institutions to find and repossess assets that have been transported across national boundaries. Asset tracing techniques may differ based on the situation but aim to completely comprehend an individual's or organization's financial assets, so informed decisions can be made about their distribution or recovery.

Asset tracing can be a complicated and tedious endeavour, depending on which assets have been concealed, and how they have been hidden. The process usually requires significant experience and attention to detail. It involves exploring financial records, analysing suspicious transactions, and leaving no rock unturned in the search for hidden assets. Frequently, technology such as data analytics and digital forensics are employed in tandem with traditional investigative methods to locate obscured assets and trace their movements.

The service of tracking down unclaimed assets is undertaken by organizations that assist individuals or companies in recognizing and claiming assets that have gone unrecovered. Asset tracing in London is a crucial element of many legal procedures, aimed at ensuring all assets are properly accounted for and that all possible legal action is facilitated. 

Asset tracing can help to locate misappropriated/stolen assets, or assets which have been acquired as the result of illicit activities - thereby denying criminals the ability to profit from their crimes. 

The Initial Stage of Asset Tracing: Identification

Identifying the assets that belong to the person or entity under investigation is the primary step in the asset tracing procedure. This stage should begin by collecting details relating to the subject, such as their financial records, employment history, and any other relevant data. Information may also be gathered through conducting interviews with those knowledgeable of the subject's financial transactions and from openly accessible sources like property and business registration records.

The aim at this point is to gather sufficient information which can be used to identify all possible assets owned by the person... This might include both tangible and intangible assets, their investments, real estate, vehicles, shareholdings, and intellectual property. This first step should be carried out diligently and with as much time as is necessary; as it will lay down the groundwork for subsequent steps in the investigation.

Completeness and thoroughness at this stage are vital to ensure no assets are overlooked and all assets are accounted for. Early identification of potential flags or indicators of fraud or misappropriation can help sharpen the focus of later stages of the asset tracing process.

The Next Stage: Secure

This stage focuses on securing any assets which were previously identified... This involves ensuring the assets aren’t transferred, sold, or otherwise disposed of prior to their discovery and recovery. Achieving this may require acquiring a court order, such as a freeze or restraining order, preventing the subject from selling the assets or requiring them to be surrendered to the court.

Securing assets is a crucial point in the asset tracing procedure. It ensures assets can still be retrieved even if the subject attempts to obscure or get rid of them. This step becomes especially important if the subject is likely to take evasive action. 

Steps taken to secure the assets must be properly documented and enforceable. It would be advisable to seek the advice from experienced legal counsel at this stage, in order to ensure that the assets are securely locked-down and that any court orders or legal measures are enforced.

Third Stage: Conversion

The conversion stage or the third phase of asset tracing, transforms the identified and secured assets into a form that can be easily located and recovered. This could involve converting the assets into cash, transferring their ownership to another person, or somehow enhancing their accessibility.

The goal behind this step is to allow assets to be accessed easily, so that they can be recovered  efficiently and inexpensively. This stage may involve negotiating with the subject or other individuals/entities with a stake in their assets, such as banks, finance companies, or other financial organizations.

Sometimes, the conversion phase may involve selling hard-to-retrieve assets, like real estate or investments, to generate the funds needed for debt repayment or distribution to other parties. Careful consideration must be given to the assets value and potential implications of selling them at this stage.

The conversion phase of asset tracing in the UK is key to the process of locating and recouping assets. It simplifies asset accessibility and decreases chances of additional complications or delays in the recovery process.

The Final Stage: Recovery

The ultimate stage of asset tracing is the recovery phase. The recovery phase involves identifying and retrieving the assets which were previously identified, secured, and converted. The nature and location of any assets will dictate the approaches and techniques employed at this stage. Depending on the asset and circumstances, you might now require the involvement of legal counsel, financial experts, or law enforcement agencies, in order to help recover of the asset.

The aim at this point is to find and recover the assets as swiftly and effectively as feasible, while also ensuring that all legal protocols are complied with. This might involve the use of court orders, seizing property or other assets, or garnishing the subject's salary or bank account.

Negotiations may be required during the recovery stage with the subject and other interested parties to reach an agreeable resolution. This could involve agreeing upon a debt payment plan or distributing the assets to other parties.

Regardless of the methods used, the recovery phase of asset tracing is the most critical and often the most challenging part. Apart from comprehensive understanding of the rules and regulations related to the assets and their location, the ability to effectively connect with various people and organizations is necessary. The recovery phase of asset tracing puts the last touch on the process of locating and recovering assets.