In divorce financial disclosure the key to unlocking a smooth divorce is full and frank financial disclosure is required by both parties. Failure to fully disclose can cause delays and increase the cost.
There can be serious consequences for failure to provide financial disclosure in Ontario family law, from orders to search for known hidden assets, freezing orders, transfer orders and contempt of court proceedings. However, you may be in breach of the civil and or criminal law if you search your spouse’s private documents.
Your head is in a spin, your world turned upside down. Separation can do that to you. It breeds upheaval and uncertainty. What’s going to happen to the house, the kids, your retirement savings, those tax payments? Questions, questions. And on top of all this, your lawyer keeps calling and hassling you about something called ‘financial disclosure’. You’re thinking ‘Really? Right now? Is digging out some old documents really that vital?’
For once, your lawyer is right. financial disclosure in Family Law is crucial to a smooth separation. It’s why I call it the really big domino. Because if it’s not sorted, all else stalls. But once the domino falls out of the way, it serves as the catalyst for a chain reaction that’s the fast-track to more harmony, faster agreements and hopefully a more amicable separation.
In this article, I’ll outline what financial disclosure in family law is and why you need to do it accurately and honestly if you want the most hassle-free separation you can get.
Disclosure in family law isn’t a simple journey from A to B. It involves multiple Levels, varying in depth based on individual circumstances and legal issues. Let’s dig into these Levels:
The initial Level of disclosure involves imparting relevant financial information to the other spouse. The Ontario court system uses Financial Statements to guide parties in providing pertinent information, a process essential whether you are involved in a court case or not.
The Family Law Act stipulates this requirement in Section 8, requiring each spouse to serve and file a statement confirmed by an oath that details their property, debts, and other current and historical liabilities.
The Family Law Rules specify that the initial Financial Statement in a court proceeding must include comprehensive income and financial information, as mandated by the child support guidelines. This documentation includes tax returns, notices of assessment, and detailed employment and business income statements covering the last three years. These documents are fundamental in verifying the accuracy of the information given in the Financial Statement.
Beyond the financial statement, other documents required under the Family Law Rules include bank statements, pension records, and real property assessments at relevant dates, particularly the valuation date, which is the date of separation. This documentation helps paint a complete financial picture, essential for claims involving equalizing net family property.
When making or defending claims, such as excluding inherited property, the Financial Statement form requires detailed documentation to support these claims. However, the complexity of family law often requires more extensive evidence to support or refute claims adequately, going beyond simple form requirements.
Certain assets require professional valuations to determine their fair market value. This Level involves obtaining credible professional opinions necessary to substantiate the values listed in the Financial Statement.
In cases where the provided information is insufficient or unreliable, a full audit may be necessary. This extensive review involves scrutinizing all provided documentation to resolve discrepancies, particularly in situations involving self-employment or complex financial structures.
Document gathering is a time for precision, not estimation. There can be no mistakes, no misunderstandings, no secrets. It’s the only way that both spouses can be protected.
After you and your spouse reach an agreement, and before you sign anything, you should get your lawyer to review your financial disclosure, to make sure you’re fully aware of your family’s financial position.
Disclosure Workshop with a Certified Divorce Financial Analyst is a service excelling in one critical area: Family Law Financial Disclosure.
Disclosure Workshop pinpoints the legal issues you are addressing or challenging and strategically positions you ahead of these issues through meticulous financial disclosure.
Our workshop not only builds trust and credibility but also reduces costs, shortens the resolution timeframe, and strengthens your legal position—all through comprehensive financial disclosure.
Why for separation and divorce in Ontario, what the financial disclosure forms are used: Ken Maynard CDFA, Acc.FM 2024-08-13T15:16:31-04:00
Why for separation and divorce in Ontario, what the financial disclosure forms are used:After financial disclosure, then complete the Financial Statements
Form 13: Financial Statement (Support Claims)Use Form 13 if you are making or responding to a claim for spousal support, or you are responding to a claim for child support, or you are making a claim for child support in an amount different from the table amount specified under the Child Support Guidelines.
Use form 13.1 for making or responding to a claim for property, an equalization payment or the matrimonial home.
Why some people object to providing financial disclosure Ken Maynard CDFA, Acc.FM 2024-04-27T16:41:46-04:00
Why some people object to providing financial disclosureIn an ideal world, both spouses would be happy to supply all the necessary financial information for the good of their family and their future. But, of course, things don’t always work out that way. One or both spouses may have objections, and they usually take the form of one or more of the below:
“That information pre-dates our date of separation, so isn’t applicable.”
“My spouse already knows all of this.”
“I don’t want my private details being reviewed by anyone.”
“We are splitting everything on our own terms, so this information isn’t necessary.”
“financial disclosure just seems like a lot of work.”
“I’m concerned that if my spouse or their lawyer sees the real numbers, they’ll come after me for more.”
How to avoid some of the costs of financial disclosure in family law Ken Maynard CDFA, Acc.FM 2024-04-27T16:40:02-04:00
How to avoid some of the costs of financial disclosure in family lawObviously, preparation is key, and if you keep accurate and well-organized accounts at home, your task will be that much easier when it comes to finding the documents you need.
Either way, your lawyer will assume that every document you provide will be challenged by your spouse’s lawyer, so you must submit the entire document, even if you think some of the pages look irrelevant. They might be crucial to your lawyer, and not submitting them will cause delay, and remember, delays cost you money.
Why is financial disclosure so expensive? Ken Maynard CDFA, Acc.FM 2024-04-27T16:38:43-04:00 Why is financial disclosure so expensive?Financial disclosure takes time and costs money. Every document you submit to your lawyer, you will be charged for, even if you submit a document that’s rejected for being irrelevant, as it will involve your lawyer looking at the document, writing to you and asking you to resubmit the correct document. That alone could cost you $200.
Finding the documents required is a tedious process. Often, people are asked to look for these things while their lives are in a state of disarray. They’re angry about what’s happening to them or frightened about what might happen. They’re not thinking straight, and digging out documents isn’t what they want to be doing. But it needs to be done to shift that domino.
It would help if spouses were told by their lawyers what’s required, where they can find the documents and the relevance of each document. Details are essential in financial disclosure in divorce, because without them, your final separation agreement may not properly take into account all the assets, liabilities and necessary tax considerations.
And yet, so often, corners are cut and the full picture not revealed. This simply sows the seeds for future problems. Spouses are forced to call their lawyers to seek clarification, or lawyers will chase-up their clients to see how the document hunt is going and if you’ve found that missing one yet. And guess what? Your lawyer will be charging you for every call.
Will failure to provide financial disclosure affect my separation agreement? Ken Maynard CDFA, Acc.FM 2024-04-27T16:34:51-04:00
Will failure to provide financial disclosure affect my separation agreement?The short answer is yes. It can totally nullify it. The Family Law Act allows the Courts to set aside (in other words, not enforce) any separation agreement that does not include full and complete financial disclosures. That’s bad news because you will have wasted time and money on drawing up a separation agreement that is not legally binding, and you’ll be back to the drawing board. Hopefully, you’re getting the idea that your financial disclosure is the lynchpin of your separation agreement.
Put bluntly, it’s down to each spouse to treat the financial disclosure process with the respect it deserves. And it requires an unerring focus on three key features:
Honour all three and you’ll be paving the way for a much smoother divorce process. A more open and amicable settlement that can be reached outside the family court. It usually leads to a longer-lasting agreement too. But fail with any one, deliberately or otherwise, and the consequences could be costly. Mistrust will prevail, and there are likely to be future repercussions. The simple fact is the truth will out in the end. So you might as well tell the truth in the beginning.
What are the divorce financial disclosure documents that are required? Ken Maynard CDFA, Acc.FM 2024-04-27T17:00:30-04:00
What are the divorce financial disclosure documents that are required?Your lawyer or mediator will be able to give you details but, typically, all of the following are required to be provided as part of financial disclosure:
Put simply, divorce financial disclosure is the part of a separation in which spouses exchange information about their finances. Each is required to complete what’s known as a financial disclosure form. It’s an essential part of any separation as it’s crucial to building-up a picture of the financial situation each party is in.
In essence, it’s an opportunity for both parties to “show their cards”, and requires the submission of supporting documentation that proves things like savings, investments, pensions and other assets each spouse has.
Let’s be straight here – it’s not exciting but it is essential. So be prepared to start digging through those drawers at home for dusty bank statements, credit reports, property deeds and the like. financial disclosure also requires the declaration of the nature of any debts and liabilities you’ve had at three key stages:
My ex-spouse is delaying financial settlement. What can I do? Ken Maynard CDFA, Acc.FM 2024-04-27T16:27:32-04:00
My ex-spouse is delaying financial settlement. What can I do?If your ex-spouse is delaying the financial settlement, you can request the court to order them to comply with the necessary financial disclosure. Legal measures can be taken to ensure that the process moves forward, such as setting deadlines or appointing a third party to gather the required financial information. This action helps to avoid unnecessary delays in
Do I have to give my ex my tax returns? Ken Maynard CDFA, Acc.FM 2024-04-27T16:26:17-04:00 Do I have to give my ex my tax returns?Yes, you have to provide your tax returns as part of the financial disclosure process in a divorce. Tax returns are crucial for assessing income, which is a key factor in determining spousal and child support obligations, as well as in the division of assets.
Can you divorce without financial disclosure? Ken Maynard CDFA, Acc.FM 2024-04-27T16:24:28-04:00 Can you divorce without financial disclosure?No, completing financial disclosure is a necessary step in the divorce process in Ontario. It ensures that all financial assets and liabilities are fairly considered and divided. Divorcing without financial disclosure can lead to an unfair settlement and possible legal challenges in the future.
How to fill out Form 13.1 Financial Statement? Ken Maynard CDFA, Acc.FM 2024-04-27T16:22:29-04:00 How to fill out Form 13.1 Financial Statement?Form 13.1 Financial Statement should be completed with detailed accuracy. It requires information about your assets, liabilities, income, and expenses. It’s advisable to consult with a Certified Divorce Financial Analyst or a lawyer to ensure that the form is filled out correctly and thoroughly, reflecting your financial situation comprehensively to avoid any potential issues during the divorce process.
Can I refuse financial disclosure? Ken Maynard CDFA, Acc.FM 2024-04-27T16:21:11-04:00 Can I refuse financial disclosure?No, you cannot refuse financial disclosure in a divorce in Ontario. Refusing to disclose financial information can lead to legal consequences, including penalties or the court making decisions based on the available information, potentially to your disadvantage.
How many months of bank statements for divorce are required? Ken Maynard CDFA, Acc.FM 2024-08-13T15:15:01-04:00
How many months of bank statements for divorce are required?Typically, six to twelve months of bank statements are required for divorce proceedings. However, the exact period can vary based on the specifics of the case and any discrepancies that may need to be addressed.
Is financial disclosure required for divorce? Ken Maynard CDFA, Acc.FM 2024-04-27T16:19:21-04:00 Is financial disclosure required for divorce?Yes, financial disclosure is required for divorce in Ontario. It ensures that the division of assets, child support, and spousal support are based on accurate and complete financial information, allowing both parties to reach a fair settlement.
Do you have to show bank statements in divorce? Ken Maynard CDFA, Acc.FM 2024-04-27T16:18:16-04:00 Do you have to show bank statements in divorce?Yes, you typically have to show bank statements in a divorce as part of the financial disclosure process. These documents provide essential information about your financial status, including income and expenditures, which are important for determining support payments and asset division.
What is financial disclosure in divorce? Ken Maynard CDFA, Acc.FM 2024-04-27T16:16:36-04:00 What is financial disclosure in divorce?Financial disclosure in divorce involves both parties providing full and frank details of their financial assets and liabilities. This includes income, properties, investments, debts, and other relevant financial information. The aim is to ensure that all financial matters are transparent, facilitating fair negotiations and settlements.
What happens after financial disclosure in divorce? Ken Maynard CDFA, Acc.FM 2024-04-27T16:15:15-04:00
What happens after financial disclosure in divorce?After financial disclosure in a divorce, both parties have a clear overview of each other’s financial situations. This transparency allows for equitable negotiations regarding asset division, child support, and spousal support. Completing this step is crucial for making informed decisions and finalizing the divorce settlement fairly.
There’s a price to pay for failure to provide complete financial disclosure in the separation and divorce process:
DELAY – proceedings can be held up by failure to make full and complete financial disclosure. Sometimes this is unavoidable; after all, many banks only hold data for up to 8 years. Delays also occur when documents that weren’t requested are submitted by either or both parties, which will result in a call from your lawyer querying the submission (more about that later).
DAMAGE – lack of honesty and transparency during separation can damage the reputation of a spouse and spoil the spirit of goodwill that’s hopefully pervading around the separation. A spirit of goodwill is what is required to complete a separation in good time.
DISRUPTION – lawyers are likely to chase-up spouses who haven’t provided full financial disclosure or the associated documents that are required (or ones that aren’t required), and this could generate delays and additional professional fees and a costs award.
DETENTION – in extreme cases, being deliberately dishonest on your financial disclosure form can result in imprisonment. More often, the punishment takes the form of verbal warnings or fines. Make no mistake, it’s a serious offence, because by signing the financial statement for family court, you are completing a sworn statement which is akin to being under oath in court.
In Blaney v Blaney, the Ontario Superior Court of Justice ordered the husband to pay costs because he continually delayed providing financial disclosure. You have been warned!
When you enter mediation, certainly with us here at Divorce the Smartway (DTSW), time will be spent during your sessions on educating you on the importance of financial disclosure. During my mediation sessions, you will be provided with the appropriate reference materials, including videos and access to our very own financial disclosure Wiki and interactive portal.
We use the standard court forms as mentioned earlier – those unfortunately numbered Forms 13 and 13.1. We also build the forms into some of the most advanced settlement analytics known in the industry. Using these will help you reach a settlement faster, with more clarity and certainty.
Navigating through a family law matter, such as a divorce, can be a complex process. The importance of complete financial disclosure cannot be overstated. It forms the bedrock of a fair and equitable settlement. It’s not just about disclosing your income, but it involves a detailed list of all your assets and liabilities, including business interests and recent statements of bank and credit card accounts.
The financial disclosure process, which includes providing financial statements and supporting documents like income tax returns, is a crucial step in determining aspects like child support, spousal support, and property division. If you’re self-employed, your financial status might be more complex, and the disclosure process merits even more attention.
Non-disclosure or inaccurate financial disclosure can lead to additional costs, legal fees, and even a court order for full financial disclosure. In some cases, the court may resort to striking pleadings if a party fails to meet their financial disclosure obligations. It’s essential to remember that the Supreme Court and family law rules mandate complete disclosure.
Many clients find the process daunting, but with the right guidance from a family lawyer or a divorce mediator, it can be managed efficiently. Remember, the goal is not just to comply with the law but to ensure that both separating spouses can make informed decisions about their financial position and reach an agreement reached that is fair and equitable.
Whether you’re dealing with support issues, property issues, or other legal matters related to your divorce, remember that full disclosure is not just about transparency—it’s about paving the way for a smooth transition to the next phase of your life. It’s about ensuring that the agreement reached is not just legally sound but also reflects the specific circumstances of your family law matter.
In conclusion, the financial disclosure process is a critical component of any divorce proceeding. It ensures that all parties have a clear understanding of the financial position of the other party, which is essential for reaching a fair and equitable settlement. So, ensure you disclose, provide accurate financial disclosure documents, and remember, the goal is a smooth divorce process and a secure future.
